Recent reports indicate that the tariffs imposed under the administration of US President “Donald Trump” may cause a significant increase in operating expenses and disrupt supply chains, which will negatively affect the volume of investments in the oil and gas sector by 2026.
The report confirms that the energy sector in the United States relies heavily on global supply chains to provide essential materials such as drilling platforms, valves, and specialized steel. The fees imposed on these components are expected to increase the costs of materials and services by between 4% and 40%, which will reduce the profit margins of companies operating in this field.
According to the data, the United States imposed customs duties ranging between 10% and 25% on raw materials not covered by the trade agreement between the United States, Mexico, and Canada, in addition to a 50% duty on steel, aluminum, and copper.
Experts expect that these fees may change the cost structure in this sector and increase uncertainty about the sources of raw materials. This may lead to delays in final investment decisions and postpone offshore field projects worth more than $50 billion to 2026 or later.
The report also clarifies that inflation and financial instability resulting from customs duties may push companies to renegotiate contracts and add new clauses related to force majeure and risk sharing.
Expectations indicate that the continued market turmoil will push companies to prioritize the flexibility of supply chains at the expense of reducing costs, by shifting towards local suppliers or countries not subject to customs duties, in addition to resorting to free trade zones or reclassifying fees in order to manage costs.
The report warns that the continuation of these policies may lead to a slowdown in investments in major energy projects and reduce the ability of companies to deal with cost increases, which may negatively affect the growth rate in the US oil and gas sector in the coming years.
The report confirms that the energy sector in the United States relies heavily on global supply chains to provide essential materials such as drilling platforms, valves, and specialized steel. The fees imposed on these components are expected to increase the costs of materials and services by between 4% and 40%, which will reduce the profit margins of companies operating in this field.
According to the data, the United States imposed customs duties ranging between 10% and 25% on raw materials not covered by the trade agreement between the United States, Mexico, and Canada, in addition to a 50% duty on steel, aluminum, and copper.
Experts expect that these fees may change the cost structure in this sector and increase uncertainty about the sources of raw materials. This may lead to delays in final investment decisions and postpone offshore field projects worth more than $50 billion to 2026 or later.
The report also clarifies that inflation and financial instability resulting from customs duties may push companies to renegotiate contracts and add new clauses related to force majeure and risk sharing.
Expectations indicate that the continued market turmoil will push companies to prioritize the flexibility of supply chains at the expense of reducing costs, by shifting towards local suppliers or countries not subject to customs duties, in addition to resorting to free trade zones or reclassifying fees in order to manage costs.
The report warns that the continuation of these policies may lead to a slowdown in investments in major energy projects and reduce the ability of companies to deal with cost increases, which may negatively affect the growth rate in the US oil and gas sector in the coming years.
