Editor's Note: Below is a brief excerpt from an institutional research note written this morning by Hedgeye Potomac Senior Energy Policy Analyst Joe McMonigle. Joe is in Cleveland at the Republican National Convention.
As Republicans gather this week in Cleveland, there will be considerable talk about energy issues – support for hydraulic fracturing, coal, natural gas, LNG and overall US energy independence. While Donald Trump has not provided many specifics on his energy plans, there is a solid consensus that his administration would be favorable to fossil fuel energy sectors with very little downside risk for investors.
However, there is an emerging election risk to energy markets and that is Trump’s pledge to nullify the Iran nuclear deal.
It would be especially disruptive to oil markets as Iranian crude exports have regained significant market share in recent months.
The International Energy Agency (IEA) said last week that Iran’s crude production rose to 3.66 million barrels a day in June and 750,000 barrels a day since January when international nuclear sanctions were lifted.
Re-imposing US sanctions could put much of this new Iranian crude exports on the market at risk.
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