You don’t appoint Rex Tillerson, the Exxon C.E.O by chance to lead the State Department. Oil and fossil fuels have always played an important role in American policy, when it comes to price issues or relations with producing countries, as it was during the Bush era, both the father and his son, who started their carrier in Texas, the most important producing State. Donald Trump is reviving the tradition. But the stakes are different because the world today became more complex, American production has evolved and the Middle East is put to fire and sword.

During the coming days, three major events will take place: elections in Iran, the renegotiation of the OPEC agreement regarding the reduction of oil production and the first Donald Trump foreign trip. It will be in Saudi Arabia and it is not by coincidence. Until now, the production agreement has been respected. It fell by 1.4 billion barrel per day and prices stabilized around 50 $ per barrel. But OPEC countries exports fell only by 0.8 million b/d because they reduced their consumption and draw on inventories. On the opposite, American production rebounded thanks to the strong reduction of shale oil extraction costs. The number of rigs in Texas and New Mexico basins has increased since the beginning of the year. New producers had been the first ones to be impacted by price fall. They regained financial markets confidence; They are subscribing again to their shares and bonds issuances. A major restructuration has occurred and funds, which financed their investments have become their shareholders and have faith in their future. The current prices level is not any more an obstacle for the “Cowboyistan” oilfields which, five years ago were at the origin of the price slump. Saudi Arabia strategy to eliminate them has failed. Regarding major companies, they are well. Exxon and Chevron have announced results on the rise.

The lifting of the oil export ban decided by the Obama administration has also contributed to stimulate production which was confronted with the saturation of American refineries capacities. The decision of the Trump administration to authorize the construction of the pipeline which connects Canadian fields to the center of the United States follows the same logic and will also help the country to increase its exports and its influence on world markets. The OPEC agreement purpose was the opposite. The price fall was supposed to give a deadly shock to the shale oil whose production costs were, as it was thought at that time, incompatible with market prices inferior to 50 or 60 dollars per barrel. That did not occur. Besides that, these new fields are much more flexible than traditional ones. It is easy to stop them and, when market conditions justify it, to restart them.

The November agreement did not deliver its objectives and the U.S. has been the principal winner. The effort, accepted by OPEC members, did, as its only result, profit to American companies and to that economy. It is Saudi Arabia which bore the most important sacrifices and it was wasteful. It would have been logical to forecast a failure of the discussion about the extension of the agreement and a complete reversal of the strategy. That will not occur. Not only the agreement will be extended, and may carry a duration longer than expected, but also Russia, which was not a party, because it was not an OPEC member but which had supported it, has announced, being convinced by its Saudi counterparts, that it will continue to fulfill its commitments taken six months ago.

So, we can question about what Saudi Arabia got from the Trump administration in return. The most important point, which will be confirmed during the visit of the American president, is the toughening of the U.S. position regarding Iran, the adversary and even the enemy both for political and religious reasons, of the Saudi monarchy. It is not also a coincidence if the visit arrives right after the elections in Teheran. Once the result is known, it will be possible to adjust the message about the sanctions. On financial issues, American investment banks will bring their support to the flotation of Aramco, the Saudi oil company. It will represent, for the country several hundred of billion dollars which would compensate the losses generated by oil prices fall and which will finance the huge cost of the modernization of the Saudi army, to the benefit of the American industry. At the end, the U.S. will remain the driving country regarding oil markets during the coming years and Ryadh will take advantage of the American policy consisting in weakening Teheran. Some, in Wall Street, had imagined another strategy consisting in giving back to Ryadh its influence on oil prices through a massive long sell of oil contracts in order to convince markets that rates will stay low during a long period and to persuade investors not to support new American oil producers. They have little chance in succeeding to encourage the country to follow that direction.

The American diplomacy will not be content with these successes. It will be able to tell the Paris Agreement signatories that the United States will continue to make efforts in favor of the reduction of CO2 emissions, against all the past speeches pronounced by the new president. His decisions in favor of the coal industry, according to his electoral promises, will not change anything. The country has contributed significantly to the global stabilization of the emissions in 2016 for the third consecutive year, despite the return to growth to the world economy, as the International energy Agency has revealed. It is the substitution, in power production, of coal by natural gas which has permitted these progresses. The abrogation of the regulatory constraints on coal power plants decided by the Obama administration, the message in favor of coal miners during the electoral campaign and the weakening of the Environment Protection Agency will not affect that trend. The benefit given by shale gas production will continue and the substitution to the detriment of coal will accelerate, with its positive impact on CO2 emissions.

This policy has an international scope. A first agreement with China has been concluded including GNL export from a new terminal built near New Orleans. The United States support the fight against climate change in other countries since China is following the same strategy about the substitution between fossil energies, along with investing in renewable, as the U.S. are doing. The American president will be able to answer those who criticize his comments about the Paris Agreement, that his country contribution to the respect of these objectives is much more important than most other countries. So, he has accomplished a double achievement in regaining the control of oil markets in exchange of a support against Iran, which he was definitely decided to give and in satisfying his electorate through a skeptical message about climate, when he was comforting the American effort in favor of the reduction of emissions.

Time has now come to have a less critical and more rigorous attention to American policy. It will permit to avoid unfounded criticisms.