Opinion: Chaos theory

A disputed presidential election could throw the US political system into disarray, destabilising energy markets

The US is poised to wrap up voting in what may prove to be the most contested presidential election in generations. With President Donald Trump refusing to say whether he will respect the results if he loses, the world's greatest superpower — and largest oil producer — could be entering a dangerous new era. Trump, ever the disruptor, is setting the tone. "This is not going to end well," he warned in his first debate with Democratic challenger Joe Biden in September.

Barring a lopsided victory for Trump or Biden on 3 November, the post-election period is likely to be marked by claims of fraud and voter suppression. Election watchers are warning of a possible "red mirage", in which Trump appears to be the victor on election night, only later to come up short when the more cumbersome process of counting postal ballots is complete. Trump is already insisting that postal balloting is rife with fraud.

US voters do not elect the president directly but vote for state electors who will meet on 14 December to choose the next occupant of the Oval Office. A dispute over electoral votes could throw a decision to the new Congress convening in January, under an obscure statute known as the Electoral Count Act of 1887.

Legal battles are all but inevitable. The Republican-controlled Senate — over Democrats' loud objections — on 26 October confirmed Trump's latest Supreme Court nominee, Amy Coney Barrett, creating a 6:3 conservative majority in the court. Trump wants Barrett to help decide any legal challenges in the wake of the election. But this is not 2000, when the Supreme Court halted a prolonged recount in Florida and Democratic candidate Al Gore accepted the decision.

Trump has all but encouraged violence in the streets if the election does not go his way. Biden has urged the US military to intervene if Trump loses and refuses to step down — a role that Pentagon officials are eschewing. Around the world, a contested election and a refusal to hand over power are "the stuff of autocratic regimes", says senior fellow at Washington think-tank the Center for Strategic and International Studies, Ben Cahill. "It is classic political risk." A chaotic post-election period could spark investor flight, destabilise equity markets and rattle oil markets, while unnerving US allies and emboldening adversaries.

The good ole days

The US oil industry's political analysis will have to weigh Trump's pro-drilling, anti-regulatory policies against his mishandling of Covid-19 — which has devastated the US economy and oil demand — and his upending of democratic norms. Biden's muddled responses to questions about his position on hydraulic fracturing and his strategy to transition away from oil raise their own red flags.

Biden is clearer in his call for rolling back producer tax breaks, limiting flaring and methane releases and rescinding a key oil pipeline permit. But some industry executives expect any push for higher taxes and tougher regulation to be tempered by a more pragmatic need to jump-start the US economy. "We are not as pessimistic as many are about the potential outcome for a change of administration," US refiner Valero's chief executive, Joe Gorder, says. With the world's most influential democracy facing urgent questions about the rule of law and the peaceful transfer of power, concerns about tax and regulation sound almost quaint.