Democrats regain control of Congress
The midterm elections have resulted in a “blue tsunami” with Democrats regaining control of Congress, leaving the Trump administration’s policies in question. The Democrats’ victory is seen as a response to the unpopular Iran War, which Donald Trump has admitted was a factor in the Republican mid-term losses.
Vice President JD Vance has stated that the war in Iran was “the reason we lost.” Prior to the midterms, a build-up of US military assets in the Middle East had pointed to further attacks on Iran, but analysts believe the price of such a move has now increased.
Impact on Maritime Policies
Rystad Energy’s Chief Economist, Claudio Galimberti, explained that: “A Democratic sweep changes the political cost of continuing the Iran war. The White House keeps its discretionary powers over strikes, blockades and sanctions licenses. What changes, however, is the price of using them. With both chambers now capable of passing resolutions, holding back war funding and delaying confirmations, the administration faces a shorter political runway and greater institutional pressure to find a Hormuz deal. That is relevant for oil markets because a restoration of flows through the strait is what is ultimately needed for crude supply and product inventories to normalize.”
Rystad highlights that President Trump, as Commander in Chief, can still direct military actions, with absolute Congressional over-rides highly unlikely, but with House and Senate able to apply pressure in different ways.
Rystad adds that: “A restoration of flows through the Strait of Hormuz is the prerequisite for Middle East crude supply and refined product inventories to normalize.”
Policy Making and the Administration
Analyst Darron Wadey asked: “As the Administration essentially sets executive branch policy, it can still pursue its desired paths, with that in mind, a lot will depend upon how the current administration reacts: will it continue as it has for the last two years, or compromise?”
The Dynamar analyst pointed out that Barack Obama was in a similar situation, with an all-Republican Congress, following the midterm elections in his second presidency, and was still able to follow his policy agenda using executive orders, agency rulemaking and other discretionary powers.
The challenge comes when major legislation or appropriations (finance) are needed to pursue policy. These are wholly dependent upon Congress.
Speaking having just landed in the UK, having travelled from the US overnight, Crawford-Brunt pointed out that most of the companies involved in the logistics of delivering this fuel are listed companies, “They would have to be brave or stupid,” to bring them to the US.
Turning to the US’ stance on the International Maritime Organization’s (IMO) Net Zero Framework, Crawford-Brunt suggested that Trump may be unwilling to return to last year’s tactics of threatening nations, but he said, “Anything that increases costs will be difficult to pass, it’s just not palatable right now.”
Environmental voices from within the US do not share that view. Jamie Yates, climate and renewable energy manager at Pacific Environment, said: “US voters are rejecting backward energy policies that drove up household costs and undoubtedly accelerated the effects of climate disasters.”
Pacific Environment believe the Trump administration has attempted to frustrate the IMO’s ambition at every turn. Yates urged IMO member states, “To reject delay tactics and formally adopt the Net-Zero Framework. The world has already lost a year in climate action from shipping; it cannot afford another.”
