2020 U.S. Election: What’s at Stake in the Energy Sector

By Helima Croft
RBC Capital Markets, LLC
Published September 15, 2020 | 2 min read

What would a potential change in the White House mean for the energy sector? With the race for President heating up between former Vice President Joe Biden and President Trump, there could be a sharp shift in both climate policy and foreign policy if Biden is elected. Helima Croft, our Global Head of Commodity Strategy and Mena Research, presents her outlook on the energy space from her research report “The Biden Energy Plan: Hugging the Midline”.

Required Conflicts Disclosures


Biden’s Energy Agenda

There is a strong public perception that the impact of a Trump loss would be inimical to the traditional oil and gas industries. However, we believe that Biden’s energy agenda would be fairly pragmatic by Democratic Party standards. For example, while there is a pledge for no new permits for drilling on federal lands, there is no call for a total ban on fracking or U.S. exports in his campaign platform.

Public Embrace of Renewables

We think that there is certain to be a sharp shift on climate policy and that renewables will be the big winner if Biden is elected.

Nonetheless, we see the Obama era support for natural gas continuing in a Biden administration in some capacity, as it aligns with both climate and foreign policy goals. That said, support for gas will likely be more of an under-the-radar affair when compared with the public embrace of renewables. While oil may not face a full-scale government assault, the U.S. oil industry is unlikely to receive anything close to the support that it has seen under the Trump administration.

Shifting Foreign Policy & Iran

Perhaps the biggest foreign policy shift that could impact energy would be the lifting of sanctions on Iran.

An incoming Biden administration would likely make the revival of the 2015 Joint Comprehensive Plan of Action nuclear deal a key early priority, and we think it is reasonable to envision that more than a million barrels of Iranian oil exports will be allowed back on the market by Q4 2021.

A Clean Energy Future vs. Russia

Natural gas exports feature in the foreign policy conversation, particularly when thinking about Russia, as a means of weaning Europe off dependence on Russian gas.

While Biden’s energy plan as stated is clearly about a clean energy future, natural gas should also be a relative beneficiary given its role in potentially weaning foreign emitters off dirtier coal in exchange for somewhat cleaner natural gas. Nuance is important here.

Clean Energy as a Tool for Economic Recovery

Mitigating the climate crisis and significantly stepping up investment in clean energy would be foundations of a potential Biden administration’s energy focus.

A few of Biden’s clean energy plan headliners include a $2 trillion investment in the first term, domestic goals of net-zero emissions by 2050 and a carbon-free power sector by 2035, and re-entry into the Paris Agreement. Biden also welcomes energy strategies such as carbon capture and advanced nuclear power. In our view, his proposal is hyper-focused on increasing investment in renewable energy and sustainability via the lens of economic recovery, while in comparison it is relatively less explicit on efforts to decrease development of fossil fuels in the U.S.. Notably, some of the proposals would require Congressional approval, and opposition voices in the legislature, no matter the majority, could prove restraining.

Helima Croft, Global Head of Commodity Strategy and MENA Research at RBC Capital Markets, authored the research report “The Biden Energy Plan: Hugging the Midline” on August 19, 2020. For more information, please contact your RBC sales representative.


Helima Croft

Helima Croft
Global Head, Commodity Strategy and MENA Research
RBC Capital Markets, LLC


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