U.S. oil producers are looking forward to less regulations on crude production under a Donald Trump presidency, meaning higher oil supply and consequently lower prices.

But it’s not that straightforward: Trump who was announced Wednesday as the winner of the 2024 election, has also vowed to put more sanctions on Iranian and Venezuelan barrels, meaning the global market could become tighter, potentially boosting prices.

At the same time, the increased likelihood of trade wars under Trump could dampen global economic growth and slow oil demand. So the picture for the market’s longer-term outlook is, well, decidedly mixed.

“Conceptually, the impact of a potential second Trump term on oil prices is ambiguous, with some short-term downside risk to Iran oil supply … and thus upside price risk,” Goldman Sachs commodities analysts wrote in a research note Monday. “But medium-term downside risk to oil demand and thus oil prices from downside risk to global GDP from a potential escalation in trade tensions.”

Trump expressed his enthusiasm for increased U.S. oil production while giving a speech from the Republican campaign headquarters in Florida on Wednesday, just hours before his victory was confirmed. He made a reference to Robert F. Kennedy, Jr., the independent candidate who he said would become a part of his team.

“Bobby, stay away from the oil, stay away from the liquid gold!” Trump said in a joking tone. “We have more than Saudi Arabia and Russia.” Kennedy is known for his history of environmental activism.

U.S. oil and gas production hit record highs under the Biden administration, which gradually changed its approach to the industry despite campaigning on pledges of environmental stewardship.

U.S. crude futures — both West Texas Intermediate and international benchmark Brent crude — are currently trading in the $70 to $75 per barrel range, which is lower than what many oil producers seek to balance their costs and budgets amid slowed global demand for oil and growing supply.

But a further push to open drilling projects, putting more supply on the market, would lead to lower prices, thereby decreasing revenues for American producers, said Cole Smead, president and CEO of Smead Capital.

“If the Trump administration opens up federal leases for oil and gas, Federal lands would get 25% per barrel of revenues. You will have a lot of trouble finding an oil company that can make money at $52.50 per barrel with what they have left from a $70 barrel,” Smead said in emailed notes. “The only thing that will cause drill baby drill to happen is higher oil prices based on these margins.”

“Drill baby, drill is going to run into the energy vigilantes,” he added. “Now that equity investors in the energy business know what free cash flow looks like they won’t give it up. They will allow capital expenditures to go up over their dead body.”

The U.S. is the world’s largest oil producer, accounting for 22% of the global total, according to the Energy Information Administration, with Saudi Arabia next, producing 11%. The vast majority of U.S. crude is consumed within the country, which is also the world’s largest oil consumer.

The CEO of French oil major TotalEnergies told CNBC over the weekend that whoever wins the presidency should ensure that the U.S. doesn’t lose its energy advantage.

“U.S. energy has been unleashed … since the last two, three years, production of oil has never been so high,” in the country, Patrick Pouyanne told CNBC in Abu Dhabi.

“For me, today, the U.S. has a clear competitive advantage on energy compared to many [in the] rest of the world,” he said. “So I will be surprised to see whoever is elected lose the competitive advantage.”

Many in the market forecast lower crude prices due to Trump’s encouragement of domestic oil production and greater supply. Amrita Sen, founder and director of research at London-based Energy Aspects, sees it differently due to the specter of sanctions.

“Every hedge fund I’ve spoken to thinks bearish, because [Trump has] tended to tweet about low oil prices … I actually think it’s the opposite,” she said. “There’s an enormous amount of sanctioned barrels right now in the market, especially Iranian volumes.” Iran is currently producing 3.5 million barrels per day of crude or more, Sen said, with 1.8 million of those being exported, as sanctions and their enforcement loosened under the Biden administration.

“You could lose a million barrels per day of that … when Trump was in power, Iranian exports were just 400,000 barrels per day,” Sen said. “Now I’m not saying it’s going to go down all the way, because smuggling networks are bigger and better probably now, but you could lose a million there,” she said, adding that some Venezuelan barrels could go off the market as well.

For Smead, the outlook is bearish, as he predicts lower prices putting many producers — particularly those with higher production costs — in a less-than-ideal situation.

“The price of goods that are produced is the number one factor in America’s policies,” he said. “If you are not the low-cost producer, you should be scared.”