Oil: Biden/Harris Switcharound Unlikely to Produce Much Heat

Biden: watchful of impact of oil price on domestic inflation. File Image / Pixabay.

Switching the Democratic ticket from Biden/Harris to Harris plus running mate is unlikely to cause any major impacts in the oil markets, an analyst has said.

Richard Bronze, of London-based Energy Aspects who was speaking at an EA-hosted event in London yesterday, said that higher crude values seeping through into inflation has been a concern for the Biden administration.

There's a real sensitivity to this issue that Bronze said had been missing from previous administrations.

If Kamala Harris gets the Democratic nomination as expected, the analyst said that her policy stance would likely be less radical than her earlier showing in her 2019/2020 primary run.

"My bet would be that it would less radical and more constrained" for two reasons. Because of where Harris will now be positioned within the Democratic Party and because the party's chances of controlling Congress and particularly the senate post-election "are very low".

Bronze said that feedback from market participants tends to interpret a Trump victory in November as bearish for oil.

However, Bronze said that he erred more on the side of "mildly bullish". And he based his view on four factors.

Greater enforcement of Iran sanctions, a solution to the Ukraine-Russia war even though desired being harder to deliver while any imposition of import tariffs, another Trump goal, would also need work and time to realise.

The fourth point accepted that a Trump administration would be favourable to easing upstream regulation but given that US oil production is currently at record levels, it would be the market that decides.

"This isn't a policy-driven story, it is more of an economic and efficiency story," Bronze said.