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Banks and Barrels: Will Financial Institutions Fund Trump’s Energy Revolution?

By William Emmanuel Ukpoju
Donald Trump’s return to the presidency in 2025 has reignited debates over the future of energy policy in the United States. As an advocate for “America First” energy independence during his previous tenure, Trump emphasised a strategy centred on fossil fuels, deregulation, and prioritising domestic production. This approach stood in stark contrast to the renewable energy focus of the Biden administration. Trump’s energy platform, often encapsulated in slogans like “drill, baby, drill,” seeks to revitalise the traditional energy sector, lower energy costs for consumers, and position the U.S. as a dominant player in global energy markets. In his recent speeches, including his 2025 inaugural address, Trump doubled down on these ideals, framing the expansion of oil, gas, and coal production as both an economic and strategic imperative.
Trump’s energy vision is predicated on the notion of energy security as a pillar of national sovereignty. By maximising domestic energy production, he argues, the U.S. can minimise dependence on foreign powers, particularly nations in the Middle East or those under the influence of OPEC. Furthermore, Trump has been critical of the Paris Climate Agreement and similar international accords, describing them as economic burdens that unfairly disadvantage American industry while benefiting rivals such as China and India. He has vowed to withdraw the U.S. from such agreements and dismantle policies that limit fossil fuel exploration and production.
This policy agenda includes rolling back environmental regulations and incentivising new drilling projects in regions like the Arctic National Wildlife Refuge (ANWR) and offshore areas previously restricted under the Biden administration. Additionally, Trump has called for the full replenishment of the Strategic Petroleum Reserve and the creation of a streamlined permitting process to fast-track energy infrastructure projects, such as pipelines and refineries. His administration also aims to re-establish coal as a viable energy source by lifting restrictions on mining and coal-fired power plants.
While Trump’s rhetoric resonates with energy sector stakeholders and certain voter demographics, it raises important questions about the feasibility of his proposals in today’s economic and financial landscape. The global energy market has undergone significant transformations since Trump’s first presidency. Renewable energy sources, once considered niche, have become more competitive due to advancements in technology and falling production costs. At the same time, the financial sector has faced increasing pressure from investors, regulators, and the public to align with climate-conscious policies. Many major financial institutions have pledged to achieve net-zero carbon emissions by 2050, signalling a shift away from funding fossil fuel projects.
This evolution creates tension between Trump’s pro-fossil fuel agenda and the priorities of major U.S. banks and investment firms. Financial institutions play a pivotal role in determining the success or failure of large-scale energy projects. From providing capital for exploration and production to underwriting bonds and facilitating mergers, the financial sector is deeply embedded in the energy industry’s supply chain. However, in recent years, some of the largest banks, such as JPMorgan Chase, Bank of America, and Citigroup, have faced mounting scrutiny for their fossil fuel financing practices. Environmental activists, shareholder groups, and even regulatory bodies have called for stricter oversight and greater accountability in managing climate risks.
For example, JPMorgan Chase, historically one of the largest financiers of fossil fuels, has committed to transitioning its financing portfolio to align with net-zero emissions targets. Similarly, Citigroup announced its intention to cease funding projects in the Arctic and other environmentally sensitive areas. These commitments reflect broader trends in the financial industry, where environmental, social, and governance (ESG) criteria have become integral to investment strategies. As such, the willingness of these institutions to fund Trump’s proposed drilling and extraction projects is far from guaranteed.
Conversely, regional and mid-sized banks in the U.S. have demonstrated a greater appetite for financing fossil fuel ventures. Amid the retrenchment of global banks, institutions such as BOK Financial Corp., Truist Securities, and Citizens Financial Group have significantly increased their lending to oil and gas companies. These banks, less exposed to international markets and ESG pressures, are well-positioned to benefit from Trump’s policies if they align with their clients’ interests. However, this shift raises questions about the sustainability of such investments in a world increasingly focused on decarbonisation and renewable energy transitions.
The potential divergence in financial sector support highlights the complexity of Trump’s energy policy. On one hand, his administration’s deregulatory stance and pro-business rhetoric may encourage investment in fossil fuels. On the other hand, the broader momentum toward sustainable finance and climate responsibility presents significant headwinds. This dynamic sets the stage for a critical examination of whether financial institutions will back Trump’s vision for a fossil fuel resurgence or continue their pivot toward greener alternatives.
In the sections that follow, this article will analyse the key components of Trump’s energy policy and evaluate the financial sector’s likely response. It will explore how domestic and global economic trends, regulatory pressures, and market dynamics may shape the willingness of banks and investors to support drilling and extraction projects during Trump’s current tenure. By examining the interplay between policy and finance, the article aims to provide a comprehensive understanding of the challenges and opportunities facing the U.S. energy sector under the Trump administration.

Key Components of Trump’s Energy Policy
Donald Trump’s energy policy is rooted in the belief that fossil fuels remain the backbone of the U.S. economy and a crucial driver of national energy independence. His administration’s approach, both in his previous term and his current tenure, revolves around deregulation, expanding domestic production, and pushing back against international climate agreements. Below are the key components of his energy policy:

Deregulation of the Energy Sector
Trump’s administration has prioritised rolling back regulations that restrict fossil fuel production. Key initiatives include:
•Repealing Obama-era environmental standards, such as the Clean Power Plan, which aimed to reduce emissions from power plants.
•Streamlining permitting processes for oil and gas drilling projects, particularly in federal lands and offshore areas.
•Eliminating restrictions on methane emissions from oil and gas operations, a move aimed at reducing costs for producers but raising concerns about environmental impact.

Expansion of Drilling and Exploration
Trump has advocated for expanding energy exploration in previously restricted areas, including:
•Arctic National Wildlife Refuge (ANWR): The administration supports opening parts of ANWR for oil and gas drilling, citing potential economic benefits and resource abundance.
•Offshore Drilling: Trump’s policies aim to lift bans on offshore drilling in regions like the Atlantic and Pacific coasts.
•Shale and Fracking: Encouraging hydraulic fracturing as a means of tapping into vast shale reserves, particularly in states like Texas, Pennsylvania, and North Dakota.

Energy Independence and Exports
Trump’s “America First” energy policy emphasises reducing reliance on foreign energy imports and turning the U.S. into a net energy exporter. Policies include:
•Boosting liquefied natural gas (LNG) exports to global markets.
•Replenishing the Strategic Petroleum Reserve to ensure energy security during potential crises.
•Promoting coal exports as part of his commitment to revive the coal industry.

Withdrawal from International Climate Agreements
Trump has criticised agreements like the Paris Climate Accord, arguing that they unfairly burden the U.S. economy while allowing competitors like China and India to continue high levels of emissions. His administration has signalled its intent to withdraw from these agreements to prioritise economic growth over global climate commitments.

The Financial Sector’s Likely Response
The success of Trump’s energy policies hinges significantly on the willingness of financial institutions to fund fossil fuel projects. While his administration seeks to remove regulatory barriers, the financial sector operates in a global landscape shaped by competing pressures from investors, activists, and regulators.

Major Banks and ESG Commitments
In recent years, major U.S. banks like JPMorgan Chase, Bank of America, and Citigroup have made significant commitments to align their portfolios with net-zero emissions goals. These banks have faced growing pressure from environmental groups, shareholders, and regulatory bodies to reduce their exposure to fossil fuels.
Shift Toward Sustainable Finance: Many of these institutions are redirecting investments toward renewable energy and sustainable projects, recognising the long-term risks associated with climate change and stranded fossil fuel assets.
Policy Misalignment: Trump’s push for fossil fuel expansion may clash with the climate-focused strategies of these banks, making them less likely to finance new oil and gas projects.

Regional Banks and Fossil Fuel Lending
In contrast to major banks, regional and mid-sized banks have shown greater willingness to finance fossil fuel ventures.
•Increased Lending: Institutions like Citizens Financial Group and BOK Financial Corp. have significantly increased their lending to oil and gas companies in recent years, taking advantage of opportunities left by larger banks retreating from the sector.
•Alignment with Trump’s Policies: These banks, less exposed to global ESG pressures, may be more inclined to support Trump’s energy agenda, particularly in regions where fossil fuel production is a key economic driver.

Private Equity and Alternative Financing
As traditional banks become more cautious about financing fossil fuel projects, private equity firms and alternative lenders may step in to fill the gap. These entities often operate with fewer regulatory constraints and are more focused on short-term returns.

Economic, Regulatory, and Market Dynamics
Domestic Economic Trends
•Oil and Gas Prices: The willingness of financial institutions to support drilling projects will depend on the profitability of these ventures, which is closely tied to global oil and gas prices. A prolonged period of low prices could deter investment, regardless of Trump’s policy incentives.
•Job Creation: Trump’s emphasis on the job-creation potential of fossil fuel projects may attract regional banks and investors looking to support local economies.

Global Market Trends
•Energy Transition: The global shift toward renewable energy, driven by technological advancements and falling costs, poses a long-term challenge to fossil fuel investments.
•Competition from Renewables: Solar, wind, and battery storage technologies have become increasingly competitive, potentially limiting the market share of fossil fuels in both domestic and global markets.

Regulatory Pressures
•State-Level Policies: While Trump’s administration seeks to deregulate at the federal level, state governments may impose their own restrictions on fossil fuel projects. States like California and New York, for example, have implemented aggressive climate policies that limit fossil fuel expansion.
•Litigation Risks: Fossil fuel companies and their financiers face growing legal challenges related to environmental and climate impacts, adding another layer of risk to these investments.

Final Analysis
Trump’s energy policies represent a bold attempt to revitalise the fossil fuel industry and assert U.S. dominance in global energy markets. However, the financial sector’s response will be shaped by a complex interplay of domestic and global economic trends, regulatory pressures, and market dynamics.
While regional banks and alternative lenders may align with Trump’s vision, major financial institutions are likely to remain cautious due to their ESG commitments and the broader shift toward sustainable finance. This divergence underscores the challenges of implementing a fossil fuel-centric energy strategy in a rapidly changing financial and environmental landscape.
Ultimately, the future of Trump’s energy agenda will depend on its ability to navigate these challenges and capitalise on the opportunities presented by supportive stakeholders. The next few years will reveal whether the U.S. energy sector can achieve the resurgence envisioned by Trump or if it will face headwinds from an increasingly decarbonising world.

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