It is expected that Trump will continue to emphasize traditional energy as the core in his new term, aiming to achieve the two major goals of "unleashing American energy" and "lowering energy prices".
According to the Wisdom Finance app, CITIC Securities released research reports stating that under internal and external environmental changes, the implementation effect of Trump's energy policy may differ from the previous term. Looking at traditional energy, Trump may affect the supply and demand balance of the global crude oil market from the two perspectives of "geopolitics" and "supply and demand"; for oil prices, the bearish impact may have a lag. From the perspective of clean energy, the return of manufacturing industry and AI energy use may drive the continuous increase in U.S. electrical demand, benefiting areas such as wind energy, cecep solar energy, nuclear energy, and geothermal energy; at the same time, parts of the IRA Act may be retained, and industries such as American electric cars, energy storage, wind and solar power, and nuclear energy may still have resilience. Trump's limited space for further escalation of tariffs on China's new energy products.
The main points of the Citic Securities research report are as follows:
Under internal and external environmental changes, the implementation effect of Trump's energy policy may differ from the previous term.
It is expected that Trump will continue to emphasize traditional energy as the core in his new term, aiming to achieve the two major goals of "unleashing American energy" and "lowering energy prices". However, compared to the previous term, the implementation effect of Trump's energy policy may be somewhat different.
From the perspective of the United States domestically, Trump's control over the Republican Party has significantly strengthened, and the newly nominated Energy Secretary Chris Wright may be more effective in promoting Trump's energy policy proposals.
From an international perspective, geopolitical conflicts continue to disturb global energy prices, Sino-US strategic competition is becoming increasingly fierce, and Trump's diplomatic and trade policies may have spillover effects on the global energy industry.
From the perspective of traditional energy, Trump may affect the supply and demand balance of the global crude oil market from the two dimensions of "geopolitics" and "supply and demand", including the Russia-Ukraine situation, the Palestinian-Israeli conflict, Iranian sanctions, OPEC production, tariff adjustments, and domestic production in the USA.
For oil prices, the impact of Trump's actions may not have shown a linear negative suppression since the beginning of his tenure, and the bearish impact may have a lag effect.
(1) Geopolitical situation: Regarding the Russia-Ukraine situation, before Trump and the new Congress took office, both Russia and Ukraine may intensify military actions to increase bargaining chips, Trump may exert more pressure on both sides after taking office, and the conflict intensity may decrease; As for the Palestinian-Israeli conflict, Trump may provide stronger political support to Israel, help Netanyahu achieve some pre-war goals, and the disturbance of the situation in the Middle East on oil prices may not be quickly alleviated.
(2) Supply and demand pattern: In terms of Iranian sanctions, Trump may apply 'maximum pressure' on Iran and Venezuela, Iranian crude oil exports may fall to a low point during Trump's previous term. Concerning OPEC, Trump may pressure Saudi Arabia and other OPEC member countries through diplomatic or legislative channels to increase crude oil production to counteract the impact of sanctions on Iran and Venezuela. Regarding tariff adjustments, if Trump's tariff policy is implemented in 2Q25, it may lead to a 0.5 million barrels per day decrease in global oil demand in 2025. Trump's domestic production policy in the USA may gradually take effect after he takes office, but the actual impact on US energy production may not be evident until at least 2025Q3, and the effects of increasing oil and gas production are also subject to observation.
From the perspective of clean energy, the reshoring of manufacturing and the use of AI in energy consumption may drive the continuous increase in American electrical utilities demand, benefiting areas such as wind energy, solar energy, nuclear energy, and geothermal energy. At the same time, the IRA Act may be partially retained, and industries such as American electric cars, energy storage, wind power, nuclear energy, etc., may still be resilient. Trump's space for further increasing tariffs on Chinese new energy products is limited.
(1) Demand for clean energy: Promoting the reshoring of manufacturing and supporting AI development is expected to be the two main focuses of Trump's new term policy. Manufacturing accounts for a high proportion of electricity consumption in American society, and Trump's continuous push for reshoring manufacturing may to some extent boost America's electricity consumption. Meanwhile, the existing outdated power system may find it hard to support the high-energy-consuming development of manufacturing, and the corresponding demand for power expansion and renewal is relatively clear. In addition to the electricity demand from manufacturing, the AI energy demand gap in the USA continues to widen. Tech giants are increasing their investments in datacenters and actively promoting the construction of clean energy to meet their power demands, benefiting areas such as wind energy, solar energy, nuclear energy, and geothermal energy.
(2) Development of key industries in clean energy: Although the Republicans dominate both houses of Congress, due to considerations of maintaining the interests of manufacturing in Republican states and preparing for midterm elections, the IRA Act may not be completely abolished. While the IRA Act may not be entirely abolished, Trump may still adjust some of the high-cost and yet-to-be-implemented clauses in the IRA Act through the congressional "mandatory mediation" process. For exports of Chinese new energy products, although Trump aims to protect domestic industries and reshore manufacturing through tariff means, the space for further increasing tariffs on Chinese new energy products is limited.
Regarding electric cars, the tax credit exemption policy for electric cars in the IRA Act may face adjustments, but company commitments and state government subsidies may partially mitigate the impact of subsidy reductions, and the trend of electrification in American transportation may continue.
In terms of energy storage, considering maintenance of employment and international competitiveness, the core members of Trump's newly nominated new government prioritize the development of the energy storage industry, with the related sectors expected to receive continuous policy support.
Regarding wind power and photovoltaics, Trump's recent attitude has already shown some moderation. The adjustment of subsequent subsidy policies remains to be observed, with the short-term marginal impact relatively limited.
In terms of nuclear energy, the revival of nuclear power is one of the rare consensuses in the energy field between the two parties in the USA. After Trump took office, there may be an acceleration in nuclear reactor type certification and unit approval speed, with related subsidies likely to be retained. Looking ahead, new technologies like SMR that align with AI energy use and zero carbon demands may become a new opportunity.
Risk Factors: Unexpectedly rising global geopolitical risks; Unexpected trade policy tariffs from the USA; Delay in the introduction of USA energy policies.
