'Net Bearish for Oil': Citi Warns Investors of Trump Presidency Risks

As investors brace for the upcoming election, the potential impacts of each candidate on the economy and its subsections are a hot topic for many. While Trump is campaigning on a platform to improve the economy and the average American, is this true?

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According to a recent release from Citi, a Donald Trump presidency could be net bearish for oil prices. This is due to a combination of factors, including oil-friendly policies and tariffs, along with pushing the Organization of the Petroleum Exporting Countries and allies (OPEC+) to release more oil into the market.

However, according to the same report, the main threat to oil markets under a Trump presidency would be pressure on Iran. If Trump were to readopt his previous maximum-pressure campaign on Iran, Iranian oil exports could be reduced by 500 to 900 thousand barrels per day, impacting global markets. 

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On the other hand, analysts noted that “Trump could roll back environmental policies, though broadly overturning the (Inflation Reduction Act) looks unlikely due to its positive impacts in red states.” 

And the impacts of a Harris Presidency? According to the same Citi analyst, “A Harris administration may be similar to, or slightly left of, Biden.” 

The market remains affected by geopolitical, cyber, and weather-related risks. As Citi notes, "Hurricane season is far from over—Mideast tensions remain high, with fighting in Gaza, the West Bank, Lebanon, Syria, and Yemen. However, pressure has also been mounting for a cease-fire, which could conceivably be forthcoming this summer." A cease-fire could be good for the markets and good for future Harris prospects. 

The net result? Neither candidate is a clear economic shot, but a broadly diversified investment portfolio and less risky approach through election season can help preserve capital while preparing for new positions for growth come November and beyond. 

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