Trump tariffs to lift oil and gas costs in 2026
U.S. tariffs now cover a wide set of equipment and materials the industry relies on – from specialized steel and copper to rigs, valves and compressors. Deloitte estimates duties could lift material and service costs by ~4% to as much as 40%, depending on the item and supply routes.
That squeeze hits well steel, processing gear and services, resulting in higher quotes and longer lead times.
The policy backdrop explains the math: 10%–25% tariffs on crude feedstocks not covered by USMCA and 50% tariffs on steel, aluminum and copper. Because the U.S. imports a big share of key inputs (nearly 40% of oil‑country tubular goods in 2024), a broad tariff net pushes up delivered costs for wells, pipelines and facilities.
Higher inputs don’t just dent margins – they shift timelines. Deloitte warns inflation and financing uncertainty may delay FIDs and offshore greenfields worth $50B+ into 2026 or later. As gear costs rise and capital becomes cautious, smaller-margin projects are likely to be delayed.
Operators won’t stand still. Expect more price‑escalation and tighter force‑majeure clauses to share volatility. Procurement will tilt toward domestic or non‑tariffed suppliers, use foreign‑trade zones/tariff reclassification, and dual‑source critical items. Those moves boost resilience but rarely erase cost increases.
Sanctions add uncertainty. New U.S. measures against major Russian producers keep markets debating how much crude oil actually exits the system and how quickly flows can reroute. Even with spare capacity, sanction risk bakes a premium into service quotes and complicates planning for refiners and shippers.
Big picture, 2026 favors resilience over lowest‑cost sourcing. Firms that are locked in steel and long‑lead gear early, diversified vendors, and negotiated smarter clauses will be better placed. Late movers may face thinner margins or need to resize work programs until costs settle.
The tariff drive isn’t limited to energy inputs. This week brought 10% on softwood timber/lumber and 25% on certain upholstered wood products, with earlier moves on kitchen cabinets/vanities. The White House also floated 100% tariffs on foreign films and steep duties on pharmaceuticals; Pfizer reportedly secured a three‑year reprieve via discounted‑pricing commitments.
In parallel, Washington and Beijing signaled progress toward a broader deal (including a plan to spin off TikTok’s U.S. app). For energy planners, the takeaway is constant: policy is in motion, reinforcing flexible contracts, hedged supply lines, and scenario‑based budgets into 2026.
As GNcrypto reported earlier, the tariff cycle can spill far beyond goods markets. On Oct. 11, a 100%‑tariff announcement on Chinese imports triggered more than $19B in crypto liquidations as Bitcoin slid about 8% – a reminder that policy shocks first unwind leverage and then ripple into funding costs and investment plans.
That dynamic echoes here: if fresh duties or sanctions tighten financial conditions, expect higher project hurdle rates, more caution around FIDs, and a faster pivot from “cheapest” to resilient sourcing in 2026.
