Shockwaves of Political Leadership: The Impact of Trump’s Second Presidency on Global Oil Prices

Authors

  • Mesbah Fathy Sharaf Department of Economics, Faculty of Arts, University of Alberta, Edmonton, Canada
  • Abdelhalem Mahmoud Shahen Department of Economics, College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh, Saudi Arabia
  • El-Hussien Ibrahim Mansour Department of Economics and Finance, Saint Peter’s University, New Jersey, United States
  • Abdelsamiea Tahsin Abdelsamiea Department of Economics, College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh, Saudi Arabia

DOI:

https://doi.org/10.32479/ijeep.19586

Keywords:

Trump Re-election, Interrupted Time Series, Political Uncertainty, Oil Prices, Energy Markets

Abstract

This study explores how Donald Trump’s 2024 re-election affected Brent crude oil prices using an Interrupted Time Series (ITS) model. Given the importance of U.S. political shifts on global markets, the study tests for a structural break in oil prices following the election. Using daily data from January 2022 to March 2025, it controls for key macro-financial factors: the Economic Policy Uncertainty (EPU) Index, Dow Jones Industrial Average (DJIA), and the 10-year U.S. Treasury Yield. Findings show a significant 5.25% drop in Brent oil prices immediately after Trump’s re-election, indicating initial market uncertainty. However, the trend reversed in the days after, suggesting that investor sentiment adjusted over time. A placebo test found no such effect before the election, strengthening causal claims. Additionally, a Distributed Lag ITS model revealed the decline unfolded gradually. These results echo past research linking political uncertainty to oil price volatility, highlighting the short-term sensitivity of oil markets to leadership shocks. Still, the later price recovery points to longer-term resilience. This research adds to the literature on political impacts on commodity markets, offering useful insights for investors, energy economists, and policymakers navigating politically driven market risks.

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Published

2025-06-25

How to Cite

Sharaf, M. F., Shahen , A. . M., Mansour, E.-H. I., & Abdelsamiea, A. T. (2025). Shockwaves of Political Leadership: The Impact of Trump’s Second Presidency on Global Oil Prices. International Journal of Energy Economics and Policy, 15(4), 651–660. https://doi.org/10.32479/ijeep.19586

Issue

Vol. 15 No. 4 (2025)

Section

Articles

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