After being diverted with a foray into the diplomatic world, Donald Trump has come roaring back to the tariff table and once again put markets on edge. Late on Tuesday, the President repeated his intention to pursue a policy on cars of 25%. However, he elaborated on a plan to add a similar charge to pharmaceuticals and semiconductors offering a date of 2nd of April for implementation. While markets in general are viewing these verbal spews as crying wolf, the fear is at some point one of the threats will stick and in the case of the auto industry, the effect would be catastrophic if a reciprocal stance is undertaken by opposing trading centres of the world.

Meanwhile, oil is buoyed by the damage to the CPC pipeline which according to Russian Deputy Prime Minister Alexander Novak could take months to repair. He said that shipments could fall by 30% which Reuters calculate at being 380kbpd. While Russia and the US engage in a bit of backslapping having initially met in Riyadh, the prospect of a quick peace deal and a return in force of Russian oil to the market looks very premature as the Ukrainian President has all but dismissed the talks having not been included. With the echo of a possible push back in OPEC+ shuttered barrels returning in April and cold weather in North Dakota reducing production by 150kbpd, oil price pressure has subsided but as with all trading mediums everything is subject to a news-driven twitch.  

Transition is about being pragmatic

The fallout of a US debunk of greener energies is being felt by and influencing both nation states and energy companies elsewhere. After President Trump, only hours into taking office, signed an executive order directing the US to withdraw from the Paris Climate Agreement, other countries feeling strong-armed into energy transition are now questioning why they need sacrifice their energy security at the altar of what some might think of privileged green ideals. The new US attitude has given a free pass to global warming doubters and allows for the time-old argument of, ‘what about them?’ Indonesia is a point in case. Quoted by the BBC, Hashim Djojohadikusumo, special envoy for climate change and energy of Indonesia argued, "If the United States does not want to comply, why should Indonesia”. Pointing out in terms of carbon per person per year, US citizens produce 10 tons more and justifiably concludes, "yet we are the ones being told to close our power plants... So, where is the sense of justice here?" Argentina is hinting at leaving climate accords, there are grumblings in South Africa and Brazil to name a few, but last year’s take down of double standards by President Aliyev of Azerbaijan when hosting COP29 remains apposite. In paraphrase, the President said, the EU and the US were two-faced and noted how the US was the largest historic carbon emitter. Fossil fuels account for 90% of exports and 60% of budget in Azerbaijan, replacing them is impossible and reflects similar changing attitudes in oil companies.

Norway’s Equinor announced recently that the energy giant will scale back on renewable energy investments, citing a lack of profitability in the immediate future. Chief executive Anders Opedal reasoned out the decision saying that long-term customer commitments were hard to sell, and costs had increased. Therefore, Equinor will cut investments in renewables to $5bn over the next two years, down from about $10bn. BP has been struggling with its future in terms of transitional targets and carbon promises. Some of its underperformance is blamed in analytical quarters by monies haemorrhaging in pursuit of ideology rather than profit. This has not gone unnoticed by bargain hunting investment funds. Elliott Management, in its description of the firm’s own culture, states it will take a leading role in event-driven situations to create value or manage risk. Whether or not such investors are emboldened by the swing toward fossil fuels in the US is hard to qualify, but it must help. Elliott now owns £3.8bn, or 5% of BP’s shares, and according to the FT, will seek an abandonment of its commitment to green energy by limiting its spending on renewables and selling off some of its low-carbon investments. If companies claim to be shareholder driven, then so be it.

The diverging paths of the US and Europe will be a fascinating study for the years to come under a pro-fossil fuel US President. According to Ember, the thinktank promoting climate concerns and energy transition, within the EU last year, more electricity was made from solar than from coal. Solar panels generated 11% of the EU’s electricity in 2024, while coal-burning power plants generated 10%. Fossil fuels are losing their grip on EU energy so opines Dr Chris Rosslowe, Senior Energy Analyst at Ember and co-author of its European Electricity Review 2025. He expanded, at the start of the European Green Deal in 2019, few thought the EU’s energy transition could be where it is today; wind and solar are pushing coal to the margins and forcing gas into structural decline. Indeed, in the abstract the report states how the European Green Deal has delivered a deep and rapid transformation of the EU power sector. Driven by expanding wind and solar power, renewables have risen from a share of 34% in 2019 to 47% in 2024, as the fossil share declined from 39% to a historic low of 29%.

The paths of energy independence may in certain times be classed as an ideological clash. In many cases it is not. The US is blessed with spectacular oil molecular wealth, Europe is not. The hard-won lesson of pinning industrial hopes to cheap Russian fuels has tipped the Old Continent into such an economic malaise it will be some time before it is overcome. Green energies are motivated now by necessity, and the cost of fossil fuels. China is a good example, it too seeks energy autonomy and while its use of fossil fuels will continue, it hankers after transition and a break in reliance on other peoples’ oil. One might consider how Europe and America would interchange views if the boot was on the other foot. In trading parlance, those with skin in a certain game will always ‘talk their book’. Frankly, and with no cynicism intended, the decisions by the US, by Europe, by Equinor and BP are all about money. In the end the winner will be which is the cheapest and most profitable, just as it has been, and always will be.

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