In his first speech as the 47^th President of the United States, Donald Trump echoed a key campaign slogan, “Drill, baby, drill,” signaling that his administration will prioritize ramping up U.S. oil and gas production. Trump declared his intention to declare a “national energy emergency” aimed at boosting domestic energy output, lowering prices, and increasing U.S. energy exports. These statements, made on the heels of his inauguration, are expected to exert downward pressure on global oil prices, with immediate effects on the market.

Oil prices dipped slightly following Trump’s speech, as investors await further details about his executive orders on the proposed “energy emergency.” A drop in oil prices could benefit oil-importing nations, particularly India, which relies on imports for over 85% of its crude oil requirements. India is the world’s third-largest consumer of oil, and any price reductions would help mitigate the country’s oil-related trade deficit, exchange rate pressures, and inflation concerns. The U.S. is already the fifth-largest supplier of crude oil to India, and Trump’s plan to boost American oil exports could further strengthen this trade relationship.

Trump’s speech highlighted the connection between rising energy prices and inflation, which he blamed on previous administration policies. He outlined his plan to declare a national energy emergency, stating, “America will be a manufacturing nation once again, and we have something no other manufacturing nation will ever have—the largest amount of oil and gas of any country on earth. And we are going to use it.” He promised to bring down energy prices, refill the U.S. Strategic Petroleum Reserve, and export American energy globally, declaring, “We will be a rich nation again, and it is that liquid gold under our feet that will help to do it.”

In a controversial move, Trump also announced plans to revoke the “electric vehicle mandate” set by the Biden administration, which promoted the adoption of electric vehicles (EVs) to reduce emissions. While critics argue that this move could hinder the transition to cleaner energy, Trump’s focus on fossil fuel production and exports is designed to enhance the U.S.'s energy independence.

While it’s too early to assess the full impact of Trump’s energy policies, experts predict that his push to increase oil production could add significant supply to the global market, potentially leading to a drop in prices. However, industry watchers caution that a drastic decline in oil prices could hurt American oil producers, who rely on stable prices to sustain production. Additionally, Trump’s trade policies, including potential tariffs on imports, especially from China (the world’s largest oil importer), could reduce global oil demand, further impacting prices.

Ultimately, while Trump’s administration may seek a balanced global oil market to maintain price stability, the exact outcomes remain uncertain as his energy policies take shape.