Potential Republican Impact on Global Energy Supply
Patrick Pouyanné, the chief executive of French oil major TotalEnergies, cautioned on Saturday about the possibility of a systemic energy shock should the Republican party win the upcoming 2024 US presidential election and decide to cease hydrocarbon exports. He highlighted the global supply risks during a panel discussion stating, "The only thing that could happen, which is a major systemic risk, is that the Republicans decide to stop exporting ... I am not even sure it would be gas, it could be oil one day."
US Energy Policies: Impact on Domestic and Global Prices
Pouyanné went on to explain the unique nature of American energy policies, which are primarily based on domestic gas or oil prices. The US, being resource-rich, could block exports if they are perceived to be driving up domestic prices. Pouyanné warned of a potential 'super shock' to the global energy sector if American gas and oil exports were lost, in addition to Russian exports. He also emphasized that the ultimate decision lies in the hands of private entities, not solely with the president.
The Republican Race for the 2024 Election
As the November 2024 election approaches, at least 11 Republican candidates have already declared their intention to seek the party's nomination to challenge Democratic President Joe Biden. However, as of now, few have publicized any definitive policy pledges.
Republican Criticism of Biden Administration's Oil Strategy
In the past year, the Biden administration enacted the largest-ever sale from the Strategic Petroleum Reserve, offloading 180 million barrels. This was part of a strategy to stabilize rocketing oil markets and battle high pump prices following Russia's invasion of Ukraine. This move, however, drew criticism from Republicans who accused the administration of leaving the U.S. vulnerable, with an insufficient supply buffer to effectively handle any future supply crises.
Anticipated High Oil Prices Amid Global Energy Transition
Pouyanné also expressed his anticipation for a "sustainably high" oil barrel price in the future. This, he explained, would be due to the global transition towards cleaner energy sources and a subsequent decrease in oil investments.
