'India's gain lies in Donald Trump's peace deals in Gaza, Ukraine'

VANDANA HARI, a Singapore-based energy expert and founder of Vanda Insights, has over two decades of experience in global energy affairs and geopolitics. Hari, who has extensively researched and written on Asian oil markets during her tenure at S&P Global Platts, spoke to S Dinakar in an email interview. She explained why the US is not facing an energy “emergency” in the traditional sense. Edited excerpts:

 

Donald Trump has declared an energy emergency in the US for the first time. What does it mean? 

There is no “emergency” in the US energy sector in the conventional sense. The order aims to ensure energy security nationwide, emphasising a “reliable, diversified, and affordable” energy supply. While the order highlights the US’ “inadequate energy infrastructure”, it also addresses “high energy prices” for Americans.

 

Two of Trump’s executive orders include Unleashing American Energy and Unleashing Alaska’s Extraordinary Resource Potential. What do they entail? 

These orders aim to fully exploit US energy and natural resources by removing “burdensome and ideologically motivated regulations”, targeting restrictions linked to climate-first policies. They seek to expedite permitting and leasing for energy and natural resource projects in Alaska, prioritising liquefied natural gas (LNG) production and exports. None of these measures would make a difference to US oil production growth, which has moderated to 200-300,000 barrels per day annually, or impact pump prices.

 

What is the impact on LNG production?

 

The Unleashing American Energy order directs the US Secretary of Energy to restart reviews of LNG project applications. However, US LNG capacity, already set to increase from 90-200 million tonnes per annum due to prior approvals, was unaffected by the permitting halt.

 

Do Trump’s energy policies benefit India by securing affordable oil or gas?

 

The expansion in US LNG capacity could lead to a global oversupply by the decade’s end, potentially lowering prices. However, Trump’s policies are not geared towards reducing oil or gas prices globally. India would more likely benefit from Trump’s promise to resolve conflicts in Gaza and Ukraine, as geopolitical stability could remove the crude oil risk premium. While India has taken advantage of discounted Russian oil, uncertainties caused by ad hoc enforcement of the $60 per barrel price cap have become a headache for Indian refiners.

 

Trump’s advisors plan to tighten sanctions on Iran and Venezuela. Could this eliminate supplies to China and raise oil prices?

 

Tightening US sanctions on Iran and Venezuela could send crude prices spiralling towards $90 — a risk Trump might avoid. Existing sanctions against shadow fleets trading in Russian and Iranian oil have already curbed Chinese purchases from these suppliers.

 

Trump also plans to impose tariffs on Canadian oil. What could be the consequences?

 

A 25 per cent tariff on Canadian crude, part of the blanket import tariffs on Canadian goods, would debilitate US refiners, as Canada accounts for 62 per cent of US crude imports (around 4 million barrels per day). While unlikely, such tariffs would force Canadian suppliers to offer steep discounts or reduce production, given the lack of infrastructure to redirect 4 million barrels per day elsewhere.

 

What is the impact of Trump reversing Biden’s clean energy policies?

  Reversing Biden’s policies is likely to slow the US’ adoption of clean energy, boosting natural gas consumption. Withdrawing from the Paris Climate Agreement may strengthen arguments in the Global South for balancing energy affordability and accessibility with transition goals.