In his second term, Donald Trump is expected to take a tougher stance on energy sanctions, particularly targeting Iran, Venezuela, and Russia. While the Biden administration had relaxed some restrictions, especially on Venezuelan energy, Trump’s policies are likely to be much stricter.
His administration’s push to increase U.S. oil and gas production places the country in a strong position to enforce these sanctions, which could disrupt global oil markets, raise energy prices, and intensify geopolitical tensions.
Trump has long promised to impose stricter sanctions on countries like Iran and Venezuela. By doing so, he aims to reduce the global oil supply, which could drive up prices in the short term.
However, the long-term effects are less clear. If trade conflicts worsen or global economic growth slows, oil demand might decrease, leading to lower prices despite reduced supply. This complex situation creates both risks and opportunities for the oil market under Trump’s leadership.
One of the key components of Trump’s energy strategy is the continued expansion of U.S. oil and gas production. Under Biden, the U.S. saw record-high production, but concerns over new drilling licenses and energy regulations emerged.
Trump’s Second Term Expected to Tighten Energy Sanctions, Disrupt Oil Markets and Heighten Geopolitical Tensions
Trump’s push to eliminate these uncertainties would likely encourage oil and gas companies to expand exploration and production. This surge in U.S. energy output would further solidify the U.S.’s ability to enforce energy sanctions, especially against countries like Iran and Venezuela, whose crude exports have seen increases under the current administration.
Despite sanctions, Iran has found ways to circumvent U.S. restrictions, boosting its crude production and exports. During Trump’s first term, Iranian exports plummeted as sanctions took hold. A return to stricter sanctions under Trump could further limit Iran’s ability to sell oil internationally, particularly impacting its exports to China.
The appointment of Senator Marco Rubio, a staunch advocate for tougher policies on Iran, signals that Trump’s administration will prioritize these efforts, possibly intensifying diplomatic tensions in the Middle East.
China’s role in bypassing sanctions is another critical factor. The country has used various methods, including ghost tankers and alternative routes, to import oil from sanctioned nations like Iran, Venezuela, and Russia.
Should Trump impose stricter sanctions, China could retaliate, especially since it relies on discounted oil from these nations. Increased cooperation between China, Iran, and Venezuela could further strain U.S. relations with these countries, contributing to broader geopolitical friction.
Similarly, tougher sanctions on Russia could result in heightened tensions, particularly if Moscow rejects peace deals, as the U.S. has increased its natural gas output and secured alternative supply routes for its allies. The potential for conflict in energy markets and international relations is high if Trump follows through on his sanctions plans.
