Save for later Print Download Share LinkedIn Twitter Like for much of the world, the presidency of Donald Trump has been a roller-coaster ride for Opec and its partners in the Opec-plus alliance. Trump has blasted Opec on numerous occasions. A few weeks before US midterm elections in 2018, when Opec-plus leaders decided not to lift output in response to crude hovering at around $80 per barrel, he told the UN General Assembly that “Opec and Opec nations are, as usual, ripping off the rest of the world, and I don't like it.” On the other hand, his intervention earlier this year was credited with helping end a brief oil price war between key alliance partners Saudi Arabia and Russia, reversing a price plunge to below $20/bbl that was battering the US shale sector. So what does Trump's expected exit on Jan. 20, and Democrat Joe Biden's entry, mean for Opec-plus and oil markets, both in the short and longer term? The so-called lame-duck period between last week's election and Biden's inauguration in January falls at a critical time for the producer alliance and oil markets (related). Opec-plus oil ministers are set to meet on Nov. 30-Dec. 1 and make a decision about whether to taper existing cuts by about 2 million barrels per day as originally planned, roll them over at existing levels, or deepen them (EC Oct.30'20). If negotiations break down, as they did in April, few expect Trump -- preoccupied with challenging his loss at the polls and pursuing legal efforts to protect himself post-presidency -- to act as a backstop. Trump's ability to step in as a mediator earlier this year was largely due to his personal relationships with both Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin. It was also down to his willingness to break with political norms. Trump reportedly told Prince Mohammed that he would decline to veto congressional legislation calling for an end US military support for the kingdom if the price war continued. He also threatened to apply tariffs to foreign oil imports. Reflecting this mixed reputation, some Opec delegates have described Trump as a “friend” who “cared about the health of the hydrocarbon industry,” while others have joked that his anti-Opec tweets will be missed. But what seems clear is that, under a Biden administration, the alliance will no longer face the same pressures from Washington to support prices in a range that pleases US consumers and sustains the country's oil industry. Looking ahead, at least some of the pressure on Opec looks set to ease on the announcement of promising test results from US-based Pfizer and Germany-based BioNTech's Covid-19 vaccine. Crude prices and stock markets jumped this week. But key timelines and details on the vaccine are not yet final, and its approval in Europe and the US is still pending. The new surge of Covid-19 infections in Europe and the US also adds to uncertainty about demand for oil. In short, any swift return to pre-Covid levels of oil demand is unlikely. Reflecting that uncertainty, alliance members have been holding informal talks about a cut decision, with some consensus understood to be building around extending cuts at the current level of 7.7 million b/d for at least three months until Mar. 30. Saudi Arabia's Prince Abdulaziz bin Salman, at the Adipec online conference this week, signaled that an extension could be even longer than three months and go “beyond what the so-called analysts are talking about.” Algerian Energy Minister Abdelmadjid Attar likewise said there was a possibility of an extension, and of a deeper cut if market conditions require it. Biden Era Industry sources suspect that the incoming president will take a hands-off approach to Opec-plus. Nor is Biden seen cultivating the kind of relationships with Prince Mohammed and Putin that Trump had. With that in mind, any future disagreement between Saudi Arabia and Russia over oil policy could be potentially tougher to resolve. Yet Biden’s energy transition agenda and expected weaker support for the US shale industry and fracking in general might be positive news for Opec-plus over the medium term: Policies that lead to a tightening of US supplies could deliver the one thing producers need more than anything else: higher prices (PIW Oct.30'20). But what also appears likely is that Biden will adopt a less confrontational stance vis-à-vis foes such as Iran and Venezuela (related). While he isn't necessarily going to roll back US sanctions on either Opec member soon, instead maintaining leverage, diplomacy is expected to get another chance. A senior Iranian oil source told Energy Intelligence this week that there is an expectation that the Biden administration will be less strict about enforcing the Trump administration's “brutal” sanctions, enabling Tehran to raise oil exports at moderate levels (EC Oct.23'20). The potential for an uptick Iranian and Venezuelan supplies -- along with increased Libyan output -- are already being factored into a scenario drawn up by the Opec Secretariat, Energy Intelligence understands (related). “It's still not clear if Saudi Arabia or Russia would agree to deepen their cut to make up for extra supply,” said an Opec delegate. Past behavior from the kingdom’s leadership suggests that Riyadh is far from ready to unilaterally offer deeper cuts alone, especially if it's to counter output from its regional rival Iran. But therein lies the potential for discord. Some countries are hesitant to roll over existing cuts rather than taper them as planned, let alone cutting deeper. Oliver Klaus and Amena Bakr, Dubai Compass Points • SIGNIFICANCE: Opec-plus producers will face less pressure over oil prices from the incoming Biden administration but will also lose a potential mediator. • CONNECTION: Approval and roll-out of a Covid vaccine could become a game changer for oil demand in 2021, but the timing is unclear. • NEXT: Back-channel diplomacy will get into full swing ahead of the Nov. 30-Dec. 1 Opec-plus ministerial meeting as producers seek to find consensus on the next stage of cuts. Watch the Joint Ministerial Meeting Committee on Nov. 17 for any hints on what to expect.