- Federal Lands Reopened, LNG Projects Revived Amid Legal Pushback.
- Slower Growth in US Crude Output Despite Record Production.
- EV Mandates Rolled Back, Clean-Energy Incentives Removed.
President Trump kicked off his second term with a bold agenda to overhaul environmental and energy policies. His administration quickly set plans in motion to withdraw from the Paris Agreement again and signed an executive order to unleash American energy, to ramp up domestic production and relax electric vehicle (EV) regulations, reports Gibson.
Expansion of Drilling and Energy Projects
Previously off-limits federal lands and offshore areas were reopened for drilling, and several liquefied natural gas (LNG) export projects were brought back to life. Exploration efforts in Alaska’s Arctic regions resumed, and the process for environmental reviews of oil and gas projects was expedited.
However, many of these initiatives are now facing legal hurdles. While U.S. crude production hit record levels this year, the growth rate is slowing down, and output is expected to remain mostly stable through 2026. With lower oil prices and concerns about oversupply, companies are treading carefully, and the Energy Information Agency has cautioned that new wells will be necessary to maintain production levels.
Rollback of Vehicle Emission Rules and EV Incentives
The Environmental Protection Agency (EPA) is reversing the 2024 regulations that mandated a higher percentage of low-emission vehicles starting in 2027. Fuel efficiency targets have been eased, and Trump’s “One Big Beautiful Bill” has eliminated several clean-energy incentives, including tax credits for EVs. Automakers are already adjusting their strategies; for instance, General Motors has slowed down its EV rollout and is now focusing more on hybrids and gasoline-powered models.
Impact on Oil Demand and Trade
The weakening of EV policies is likely to postpone the decline in U.S. oil demand. Analysts now estimate that EVs will account for half of new car sales in the U.S. by 2038, which is five years later than earlier predictions. This change will help keep refining operations robust, reduce crude exports, and bolster imports from the Atlantic Basin.
Global Impact and Opposition to IMO’s Net Zero Framework
On the international stage, the Trump administration dismissed the IEA’s peak oil demand theory and pushed the agency to bring back its “Current Policies Scenario.” In the shipping sector, the US’s resistance to the IMO’s Net Zero Framework caused a one-year delay in its implementation, with Washington warning of possible retaliatory actions against countries that supported it.
Tanker Market Overview
- VLCC: The AG/China route wrapped up at WS107.5 and AG/USG at WS60, with limited inquiries and a softening market sentiment.
- Suezmax: The AG market steadied at WS75; we expect activity to remain low next week.
- Aframax: Indo rates dipped to WS168, but owners are holding their ground; Indo/Up is assessed at WS170.
- West Africa: WAF/East closed at WS101; rates are feeling the pressure due to thin inquiries.
- Mediterranean: XMED routes are holding steady around WS160–165; Aframax rates have strengthened to WS205–220 thanks to solid demand.
- US Gulf/Latin America: USG/China is at $13.2m and Brazil/East at WS98; while activity has slowed, the sentiment remains stable.
- North Sea & Far East: North Sea is hovering near WS160; LR2s have bounced back to WS132.5 on TC1.
- UK Continent & Med Clean Market: MRs are steady around WS105–170; Handies are firm at WS170 in the Med.
- Panamax: Flat at WS115–120; TD21 is strong, with owners eyeing WS210+.
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Source: Gibson
