US President-elect Donald Trump’s selection of Chris Wright, an oil industry veteran, as his energy secretary is being well-received in the Middle East. One Saudi official, speaking anonymously to S&P Global Commodity Insights, called the nomination “fantastic.” However, some experts warn that an increase in US oil production under the new administration could complicate the OPEC+ alliance’s efforts to boost its own output without driving prices down. Kamil al-Harami, an independent oil analyst and former executive with Kuwait Petroleum Corp, said that more US production could lead to lower prices and weaken OPEC’s influence.
Wright, currently the CEO of Liberty Energy, a company known for its hydraulic fracturing operations, has been critical of climate change policies, particularly net-zero emissions plans. His nomination was announced on November 16 during the COP29 UN climate summit. Wright is also known for questioning the International Energy Agency’s (IEA) predictions about the peak of oil demand and has referred to the IEA’s push for a net-zero carbon pathway by 2050 as “sinister.”
Joseph McMonigle, Secretary General of the Riyadh-based International Energy Forum, praised Wright’s nomination, saying his views align with those of President Trump, especially on energy and transition policies. McMonigle expects increased cooperation in areas like carbon capture and storage (CCUS) and technologies related to the circular carbon economy, as well as a stronger focus on energy access and affordability.
If confirmed by the US Senate, Wright will replace Jennifer Granholm, the current energy secretary, who expressed hopes that energy transition policies, such as electric vehicle (EV) tax credits, would continue under the new administration. While the energy secretary does not directly regulate oil and gas production, the position oversees the Strategic Petroleum Reserve and approves LNG export authorizations. It also has influence over market outlooks through the Energy Information Administration (EIA), which can impact oil and gas prices.
Wright’s nomination follows Trump’s appointment of North Dakota Governor Doug Burgum to head a new National Energy Council aimed at boosting US energy production. Wright is expected to prioritize domestic energy policy, advocating for fossil fuel use while also addressing the rising demand for electricity.
Geopolitical analyst Rachel Ziemba noted that while Wright’s role will largely focus on domestic energy, Middle Eastern oil producers are likely to view the nomination with cautious optimism. Wright’s industry knowledge and support for fossil fuels may align with the interests of regional petrostates, which view fossil fuels as a crucial part of the global energy mix. However, Ziemba pointed out that the “America First” focus of the Trump administration may slightly offset some of the positives for Middle Eastern producers.
Wright’s stance on climate change aligns closely with the views of many Middle Eastern oil producers, who argue for the continued use of fossil fuels to meet growing global energy demands while focusing on reducing emissions. Wright has criticized the IEA’s predictions of peak oil demand by the end of the decade, a sentiment echoed by OPEC, which forecasts that global oil demand will rise to 120.1 million barrels per day by 2050, driven largely by growth in Asia, India, the Middle East, and Africa.
In the short term, OPEC and its Russia-led allies are dealing with the effects of production cuts and delays in output increases, as rising US production and weak Chinese demand growth create challenges. Analysts are predicting a supply glut by 2025, which could put downward pressure on oil prices.
The US is already the world’s largest crude oil producer, and production is expected to peak at 15.1 million barrels per day by 2030, accounting for 20% of global production. President Trump has pledged to make the US the dominant energy producer in the world.
Commodity Insights forecasts that global oil prices will remain stable, with Brent crude expected to average $84.30 per barrel in 2024 and $78.70 per barrel in 2025. However, the forecast reflects a well-supplied market, with rising output in the Americas and OPEC+ planning to ease production cuts over the next year.
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