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How will the U.S. impact the global oil and gas market?

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The global oil and gas market is a tricky one; whilst it’s volatility is somewhat unpredictable, it does seem to be on its way back up.

According to Oil and Gas Journal, global economic growth is forecast to accelerate this year. It’s said that commodity prices will begin to stabilise the countries that have been suffering over previous years, with global growth projected at 2.8% for 2017.

This is largely driven by the USA’s emerging oil and gas economy, of which Donald Trump has big ideas. So with the changing U.S. energy industry becoming awash with speculation, how will these plans impact the global oil and gas market?

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Reserves

Following Trump’s promise to crush federal regulations and embrace the shale oil and gas revolution for new areas of development, it is now thought that the U.S could rival the likes of Russia for the position of the world’s largest exporter of oil and gas. Russia currently accounts for over 20% of the world’s exported natural gas; one of the world’s more important fuels.

The U.S. have already seen great success in exploiting shale gas from fracking over the years, with evidence of it boosting tax revenues, lowering energy costs for low income families as well as creating new employment.

As previously touched upon in our post, Donald Trump’s energy plans: the story so far, the federal government owns in excess of 600 million acres of land, untouched by the fracking boom. However, it is reported that federal lands only represented 21% of U.S. oil and gas production in 2015, in comparison to 57% just 5 years earlier.

Infrastructure

It’s not surprising that there will be more pro-oil and pro-gas policies implemented by the U.S. following the appointment of some very serious industrialists into the Trump administration; the likes of former Exxon-Mobil CEO, Rex Tillerson as Secretary of State and the former Governor of Texas, Rick Perry, chosen as the new secretary of Energy.

In fact, one of Donald Trump’s first actions as President was giving the green light to both the Keystone XL and Dakota Access pipelines; ultimately furthering his promise to work against former President Obama in a bid to expand America’s energy infrastructure. The revival of Keystone has been fully welcomed by the Canadian Government due to economic growth and job creation from a project spanning almost 1,200 miles, shifting more than 800,000 barrels of petroleum per day from Canada to refineries in the Gulf coast.

Independence

The America First Energy Plan states, “President Trump is committed to achieving energy independence from the OPEC cartel and any nations hostile to our interests.”

Prior to the recent glitch surrounding immigration and employment in the U.S., something of which could have been catastrophic for hiring in the oil and gas industry in particular, one of OPEC’s biggest suppliers to the U.S. have dismissed Donald Trump’s vow to end dependence on international oil. Saudi Arabia’s Energy and Industry Minister, Khalid Al-Falih, recently stated that “the positions that the U.S. and Saudi Arabia take in global energy are very important for global economic stability” and confirmed that Saudi Arabia is looking forward to working with the U.S. in future. Besides, the U.S. still imports 9.4million barrels of oil every day.

It’s also worth a mention that with a reduction on imports and exports, does this also mean that energy security will improve worldwide?

Advances in technology and an increased need for connectivity have made data more readily available, and energy security has been catapulted to the forefront of the oil and gas industry over the past month, with industry leaders meeting last week to discuss cybersecurity in the sector.

Market stability

Each of these changes will inevitably impact the global oil and gas market. The International Energy Agency have predicted that oil output from the U.S. could increase by up to 500,000 barrels over the next year; this increase in activity will provide some market stability – a positive in such a volatile market.

Whilst this will boost employment opportunities in the U.S., Trump’s plans for energy independence, as well as his policies on immigration and trade agreements, may negatively impact the recruitment industry with regards to the global talent pool.

In light of this, Managing Director of JDR Energy, Jack Rawcliffe, believes that, “whilst we would naturally benefit from $100+ barrels of oil, those who have niched down into the entire energy mix can add value to their clients and candidates alike, supporting a number of projects globally when the market does bounce back.”