Trump's Win Boosts Oil Stocks, But Offshore Wind and Ocean Freight Tumble

Published Nov 6, 2024 12:08 PM by The Maritime Executive

The decisive electoral victory of future President Donald Trump has sent energy stocks soaring, while the initial investor reaction for the rest of the industry appears mixed. Ocean carriers might face headwinds ahead, based on early trading for Maersk, Zim and Hapag-Lloyd, among others.

Trump has promised to open the floodgates for oil and gas companies, pledging a "drill, baby, drill" orientation towards regulation. U.S. petroleum production is currently at an all-time high, and the market showed expectations that it could go even higher if producers faced fewer restrictions. At the same time, the possibility of tighter sanctions on Venezuela and Iran could reduce net global oil exports under a new Trump administration, noted analysts at Goldman Sachs.

In early trading Wednesday, U.S. energy, drilling and tanker firms showed strong performance. Offshore drilling leader Transocean jumped nearly three percent; inland barge operator Kirby rose more than six percent; Chevron rose three percent; and Exxon was up by 1.5 percent.

Shell, BP and Equinor - all active players in the U.S. Gulf of Mexico's oil patch - fell in early trading, including a four percent drop for Equinor. The global Brent benchmark oil price remained stable.

Trump has also promised to radically increase tariffs on imported goods, particularly from China. If carried out, that campaign pledge could hamper containerized freight volumes, especially on transpacific trade lanes. Publicly-listed container carriers' stocks fell in early trading, led by Maersk (down eight percent), NYK (nine percent) and Hapag-Lloyd (10 percent).

The president-elect has pledged to end the U.S. offshore wind industry by executive order "on day one," and investors in the sector have responded to the changing regulatory environment. Market leader Orsted shed 15 percent of its value on Wednesday, followed by turbine builder Vestas, which dropped 13 percent. Siemens Energy, owner of turbine manufacturer Siemens Gamesa, fell by two percent.