In his first speech after the election, Trump promised to initiate mass development of oil wells. “We have more black gold than any other country in the world! More than Saudi Arabia, more than Russia,” Trump said.
Previously, Trump had claimed that he would end the Russian-Ukrainian war within 24 hours. In his view, if oil prices were around $40 per barrel, Russia could not sustain military operations, while oil priced at $100 per barrel allowed Moscow to maintain a large military budget. U.S. oil companies lobbied for Trump’s arrival and sponsored his presidential campaign. He may provide additional environmental and tax relief to the oil industry, which would increase production and boost the capitalization of raw material companies.
The global political arena has undergone significant changes, particularly in the context of Donald Trump’s election as President of the United States. In his first speech after victory, he emphasized the development of oil wells, stating that the U.S. has more “black gold” than any other country in the world. Such words have already triggered a market reaction: the price of Brent crude oil dropped by 2%.
This is not the first time Trump has claimed that the Russian-Ukrainian war will soon come to an end. He believes that the key factor in this is the price of oil. According to his estimates, if the price per barrel is around $40, Russia will be unable to sustain its military forces. In contrast, a price level of $100 allows Moscow to finance military campaigns and maintain a high military budget. Such a drop in oil prices could deal a serious blow to Russia’s economy, which heavily relies on revenues from oil and gas exports.
The Russian budget is already feeling the pressure from Western sanctions, and further price declines could lead to a shortfall in funding for military operations. If Trump can implement his strategy for increasing oil production in the U.S., it could not only lower global prices but also reduce Russia’s capacity to wage war. Furthermore, it is worth noting that U.S. oil companies were active sponsors of Trump’s presidential campaign.
This may indicate that the new president could provide additional environmental and tax incentives to the oil industry, which would promote an increase in oil production and capitalization of raw material companies. Thus, a decline in oil prices could become an important factor in the context of international security. The reduction of Russia’s military budget due to falling oil export revenues could create conditions for a shift in the balance of power in the region and provide opportunities for Ukraine and other countries to influence the situation.
