Now Trump has won the presidency again, his policies on energy could have some noticeable effects on European energy prices, driven by several key areas:
Boosting U.S. Oil and Gas Output: Trump plans to increase oil and gas production, partly by opening more areas for drilling and cutting regulatory restrictions. This additional U.S. supply could push global oil prices down in the short term, which might lower Europe’s energy import costs. However, oil prices largely depend on global supply and demand, so even if U.S. production increases, major producers (like OPEC) might reduce their output to prevent prices from falling too low. This balancing act could limit the price drop Europe would experience.
Lower Support for Renewable Energy: Trump has previously rolled back support for renewables and opposed significant climate policies. If he follows a similar path, the U.S. may reduce investments in clean energy, impacting the global green transition and potentially slowing down renewable energy adoption. For Europe, which is deeply invested in renewables and aiming for energy independence, this could mean dealing with more energy price volatility, especially if traditional fuel costs remain high due to geopolitical tensions.
Trade Policies and Geopolitical Tensions: Trump’s approach to international trade might also bring new tariffs or sanctions that indirectly raise costs for Europe, including for energy imports. Tariffs or strained trade relations with key energy players could increase infrastructure and supply chain costs. This would not only affect Europe’s energy prices directly but could also raise the costs of building renewable infrastructure, complicating Europe’s goal of reducing its reliance on fossil fuels.
While a Trump presidency could bring temporary relief in terms of lower energy prices from increased U.S. supply, the longer-term impact would likely be more complex, with potential price volatility and challenges in Europe’s transition toward renewable energy sources.