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Regional banks in North America have been striking more deals to lend money to the oil, natural gas, and coal industry in recent years, while many European lenders have either shrunk financing for fossil fuels or pledged to lower their exposure to the sector.
As a result of the ongoing shift in financing deals in the fossil fuels sector, North American banks are not competing with European lenders for financing oil and gas anymore.
Regional banks Texas Capital Bank, Truist Securities Inc, FHN Financial, Cadence Bank, BOK Financial Corp, and Canadian Western Bank have boosted the most the number of their loan deals in the fossil fuel sector since 2022, compared with the 2016-2021 period, data compiled by Bloomberg showed on Tuesday.
At the same time, the banks that have seen the biggest retreat in the number of loan deals in the industry are France’s BNP Paribas, Natixis, and Societe Generale, Spain’s BBVA, and Dutch ING Groep, according to Bloomberg’s data.
Regional banks in North America are “active and hungry” for new deals in the fossil fuels industry, Marisol Salazar, senior vice president and manager for energy banking at BOK Financial, told Bloomberg.
While major European banks are competing to announce new policies limiting funding to oil and gas projects, smaller regional U.S. banks have boosted significantly their lending to oil and gas firms over the past two years.
Regional U.S. banks are also seeing a growing pool of customers in the fossil fuel industry. This comes as European banks are re-evaluating their funding for oil and gas, and energy-rich U.S. states are leading an anti-ESG drive to blacklist major financial corporations and asset managers, which they believe are discriminating against the oil and gas industry.
U.S. states with large fossil fuel industries, such as Texas, West Virginia, Louisiana, Montana, and Oklahoma, have blacklisted funds managed by the world’s biggest asset manager BlackRock and other major banks and financial institutions, which, the states say, are boycotting the oil and gas industry.
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By Charles Kennedy for Oilprice.com
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