Trump's pro-oil and gas bias risks hurting Australia: analysts
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President Donald Trump has sworn in a who's who of oil leaders, which analysts have warned give his administration a pro-petroleum bias that may hurt Australia.
Australia is just a small player in the oil market, but is the world's third biggest LNG exporter.
"We have seen some US-based companies not proceed with companies here in Australia and invest instead in the United States," said Malcolm Roberts, chief executive of the Australian Petroleum Production and Exploration Association.
LNG exports are worth $24 billion to the Australian economy and increased supply will hurt, with the US already muscling in on Australia's traditional markets of Japan, Korea and China.
Australia is already a high-cost producer.
"If Australia ceases to be a competitive location they have plenty of competition elsewhere to invest," Mr Roberts said.
"It's going to mean in the medium term considerably more competition in what's already an oversupplied global market for LNG. LNG demand is growing steadily but we are in a period of oversupply which is resulting in very low prices."
Energy First top priority
Donald Trump has wasted no time pushing his Energy First plan as a top priority, which involves rolling back regulations and policies including Obama's Climate Action Plan.
The Energy First plan will focus on unlocking $US66 trillion worth of untapped shale oil and gas - even potentially opening up government-owned lands, which Donald Trump has said will create energy security for the US and jobs.
As a first step for US energy resources, President Trump signed executive orders to green-light the controversial Keystone and Dakota pipelines, which will transport a million barrels of oil across four states.
That has been met with protests by native Americans and environments concerned with contamination and damage to sacred burial sites.
President Trump is also facing international tensions with the world's largest producers, members of the OPEC cartel, which are responsible for around 40 per cent of supply.
While President Obama was all about rebuilding relationships, President Trump appears to be ramping up aggression on key OPEC members.
Already he has pledged to destroy ISIS, raising concerns of an escalation of the wars in Iraq and Syria.
Earlier this month, the US imposed sanctions on 25 individuals and companies in Iran after Tehran tested a ballistic missile.
It comes after United Nations sanctions on Iran, including on oil, were lifted last year and Iran began rebuilding its oil exports.
However, with Donald Trump putting Iran on notice, analysts warn that it could lead to new oil sanctions.
"Key buyers India, Turkey, South Korea and Japan would have to go along with the US sanctions," said Ben Wilson, oil analyst at RBC Capital Markets.
Oversupplied market
The oil market has faced a significant oversupply, and OPEC last year voted to curtail production by more than a million barrels a day for the first half of 2017 in an attempt to boost prices.
Saudi Arabia pushed for the agreement within OPEC and also brokered a deal with Russia, the second largest producer, to cut supply.
Russia is also forming a close tie with the US, which is the third largest oil producer, and Donald Trump has openly admired President Vladimir Putin.
These changing global relationships between the US and Russia, and the US and Iran, are a new dynamic which will have an impact on the oil market.
"There's a lot to play out and where the reset ends up - out of all of this - remains to be seen but there's big moves afoot that will shape the energy industry and the oil industry for a long time to come," Mr Wilson said.
"The pro-oil bias towards this administration has been clear from day one."
Mr Trump has appointed former Exxon Mobil chief executive Rex Tillerson as secretary of state, Scott Pruitt as the head of the Environmental Protection Agency (a self-described advocate against the EPA's activist agenda), Rick Perry as energy secretary (he has held corporate roles in two petroleum companies) and various Texan governors to commerce positions.
Topics: oil-and-gas, business-economics-and-finance, trade, united-states, australia
