This excerpt is from a report that is available to subscribers of Stratas Advisors’ Executive Dialogue service.

During his arduous Senate confirmation hearing on Jan. 11, former ExxonMobil CEO and Secretary of State nominee Rex Tillerson answered questions on a variety of issues that helped to construct a view of how the Trump administration’s policies, and their impacts on energy markets, will evolve.

Russia

During his testimony Tillerson acknowledged that the Russian invasion and annexation of Crimea, as well as military intervention in Ukraine, was unlawful. He stated that he would have recommended that the U.S. respond to it by providing defensive lethal weapons and intelligence, surveillance and reconnaissance support to Ukraine.

Tillerson hedged on executive branch application of sanctions on Russian officials, however, citing potential economic and security considerations that might need to be prioritized. He also disagreed with Sen. Marco Rubio (R-Fla.) that Vladimir Putin should be categorized as a war criminal for his military’s actions in Syria, considering the legal and diplomatic gravity of such a designation.

Iran

During Tillerson’s testimony, U.S. Sen. Bob Menendez (D-N.J.) noted that ExxonMobil lobbied against Iran-sanctions legislation he authored, including secondary sanctions that would have affected the company’s European subsidiary’s pursuit of investments in Iran from 2003 to 2005.

Considering his record and statements, Tillerson is unlikely to be an enthusiastic advocate of unilateral U.S. sanctions that have a major negative impact on U.S. businesses. He has generally considered these to be ineffective and unfair, having the unintended consequence of creating an imbalanced playing field for U.S. businesses vis-à-vis its foreign competitors. As secretary of state, however, his priorities and stakeholders will be different than those when he was at the helm of ExxonMobil; therefore, his views on sanctions are likely to become more nuanced.

Stratas Advisors assesses that Tillerson is likely to be a moderating influence in the Iran nuclear agreement’s probable re-examination over the next four years, although the evolution of regional conflicts are likely to challenge his anticipated pragmatic approach to Iran.

Climate

Tillerson’s remarks on the Paris Climate Agreement have been somewhat liberally interpreted by various media outlets, in Stratas Advisors’ view. He stated, “It’s important that the United States maintain its seat at the table with the conversations around how to deal with the threats of climate change.” Remaining engaged in conversation, however, does not necessarily mean adhering to the Obama administration’s carbon emissions reduction commitments under the agreement.

Judging by Tillerson’s previously stated positions on climate policy dating to 2009, he would almost certainly advocate for discarding these commitments and negotiating instead for a revenue-neutral global carbon tax that maintained a level playing field for all countries and industries. The effects of such a measure in terms of shifting energy producer incentives and consumer behavior would depend on the details.