Assessment of the impact of US Energy Policy on world oil prices

Abstract

The development of the energy sector in the United States of America (USA) represents a rivalry between two different approaches, which has intensified under the last three American administrations. The competition of approaches is expressed in the confrontation between supporters of energy based on renewable sources and supporters of traditional energy resources. A comparative analysis of changes in the energy sector, depending on the prevalence of a particular approach to energy development, shows that external conditions play a key role in promoting the energy strategy. The strategy of priority development of “green†energy carried out under Barack Obama could not be realized because of the shale boom. As a result, many companies working with renewable energy sources did not stand up to the competition. The opposite approach of Donald Trump’s focus on developing traditional energy resources to ensure US energy security and to increase jobs has been hit by the COVID-19 pandemic, which has virtually nullified the US administration’s efforts under this approach. The current concept of President J. Biden is aimed at continuing the strategy of Barack Obama for the development of “green†energy in the United States. Proponents of this concept hope for the possibility of its at least partial implementation in the absence of a shale boom. The lifting of the embargo on the export of American oil has led to an increase in oil supplies abroad. As of 2018, the United States has overtaken Saudi Arabia in terms of oil and gas exports, taking a leading position in the global oil market. In 2019-2020, the United States retained the first place in the world in oil production. This article examines the conceptual approaches of American administrations to the issue of energy policy and analyzes the statistical data that characterize the traditional and “clean energy†industries. An important factor is the degree of influence of the US energy policy on global oil prices. To analyze this issue, this research uses curved regression equations to assess the impact of US energy policy on world oil prices under the administrations of Barack Obama and Donald Trump. The results of the correlation show that a more effective interaction between the variables was carried out during the presidency of Barack Obama, when Exports of Crude Oil influenced the price dynamics of oil quotes with an inverse relationship. With the arrival of the Biden administration, the strategy started under Obama in favor of developing clean energy was continued. In the context of the spread of covid-19, the growth of crisis phenomena in the national economy, the growth of production costs in the oil and gas industry, and the fall in the world energy prices, the development of green energy can have a certain effect, given the Biden administration’s approach to energy development. The subsequent actions of the Biden administration may offset Trump’s efforts to develop traditional energy to strengthen the economic potential of the United States and strengthen the position of American companies in the global oil market.