Post-Election Energy Market Outlook: Trump vs. Harris

With only a single day left to go before the election, traders may be wondering how the policy differences between Donald Trump and Kamala Harris could impact energy markets. Let’s take a look at a few key areas where their platforms differ, and what the implications may be:

Will Oil Markets Keep Pumping?

With petroleum still being one of the global economy’s key inputs, the contrasting stances put forth by the Democratic candidate Harris and the Republican Trump could have outsize effects. Trump's stance emphasises national energy independence through a "drill-baby-drill" approach, prioritising domestic oil and gas (NG) production. By removing drilling restrictions and expanding federal land leases, a Trump presidency could increase domestic production, potentially placing downward pressure on oil (CL) prices. However, heightened production might provoke a response from OPEC+, which could counteract by adjusting its member countries’ target output to maintain market share.

Harris, on the other hand, seeks to reinforce the transition toward renewable energy, backed by legislation like the Inflation Reduction Act (IRA). Her policies would encourage investment in clean technologies and electric vehicles while likely tightening environmental regulations on oil and gas operations. This shift could lead to reduced domestic oil demand over time, supporting a gradual decline in prices as renewables grow. 

Global geopolitical dynamics will also factor into oil price volatility. Depending on geopolitical developments and the differing stances Harris and Trump could take toward various actors in the Middle East, tensions could disrupt supply chains and cause price spikes. 

Trade relations, especially with China, also face changes based on the election’s results. Trump's aggressive trade policies may slow economic growth in key oil-consuming nations, potentially reducing global demand. Meanwhile, Harris’s steadier approach could support more predictable oil market conditions. Overall, the election’s outcome will set the tone for future oil investment and global supply strategies. 

Could Green Energy Stocks Get Renewed?

Energy policy differences stand to shift markets beyond oil as well. If Harris wins the presidency, her policies would likely favour clean energy and renewables, making companies like First Solar (FSLR) prime candidates for growth. 

With her support for the IRA, renewable energy firms could see a new rise in investment, and electric vehicle (EV) manufacturers like Rivian (RIVN) may benefit from expanded tax credits. These policies would provide critical incentives for competition against industry giant Tesla (TSLA), which has received Trump’s endorsement.

The offshore wind sector could also see a boost under Harris. Major investors like Iberdrola (IBE.E), whose U.S. subsidiary Avangrid has shown strong growth, may experience further gains, thanks to her stated commitment to sustainable energy infrastructure. This growth may be underpinned by federal incentives for offshore wind installations and the development of critical grid infrastructure to support renewable power distribution across the United States. 

Going Nuclear

Furthermore, nuclear energy production has been gaining support both among U.S. citizens and their leaders. Both the Biden and the first Trump administration have emphasised simplifying regulation as regards this sector, and the energy issues stemming from sanctions against Russia have contributed to growing bipartison enthusiasm for nuclear energy. Whichever candidate wins on 5 November, nuclear energy could be in for a boom over the next four years. (Source: S&P Global)

Conclusion

In summary, the upcoming election’s outcome will shape the future landscape of energy and related markets, influencing oil prices, renewable investments, and specific sectors from defense to financials. Traders should closely monitor the results, as significant volatility could be ahead and the market's trajectory is as yet unknown.