Descrease article font size
Increase article font size
U.S. President Donald Trump’s sweeping tariffs are set to raise operating costs, disrupt supply chains and weaken investment momentum for the oil and gas
industry in 2026, said a report published by global financial firm Deloitte on Wednesday.
The energy industry relies heavily on global supply chains and internationally sourced materials such as drilling rigs, valves, compressors and specialized steel are central to their operations.
However, the U.S. has imposed tariffs on a wide range of imports, including 10 per cent to 25 per cent on raw materials not covered by the United States-Mexico-Canada Agreement and 50 per cent on steel, aluminum and copper.
The report said those tariffs add uncertainty around the sourcing of steel, aluminum, copper and other materials and could reshape the industry’s cost structure by increasing material and service costs by between 4 and 40 per cent.
Story continues below advertisement
The shift is significant given the United States’ reliance on imports, said the report, with nearly 40 per cent of the pipe and other tubular goods used by the oil industry in 2024 met through foreign sources.
Get breaking National news
For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.
It suggests the inflation and financial uncertainty sparked by the tariffs could push final investment decisions on projects worth more than $50 billion (U.S.) to 2026 or later.
2:07
Middle East conflicts causing large swings in oil prices
The report said tariffs could also have a significant impact on crude oil costs for American refiners.
“Although the majority of crude oil imports from Canada and Mexico are USMCA-compliant, tariffs on non-USMCA-compliant imports, up to 10 per cent for Canadian and 25 per cent for Mexican crude, could widen the WTI-WCS (West Texas Intermediate-Western Canada Select) spread, raising U.S. refinery costs and increasing refinery uncertainty.”
Story continues below advertisement
On Wednesday a barrel of WTI was selling at about a $13. (U.S) premium over a barrel of WCS.
With files from Global News.
