No industry is more reliant on steel than oil and gas. If President Trump does follow through on implementing new tariffs on imported steel, the impacts of that decision will be felt throughout the depth and breadth of the oil and gas business.
The list provided by David Blackmon on Forbes is long. Here’s a few highlights:
- Oil storage tanks? Made from steel.
- Dehydrator units and compressor stations and heater-treaters and amine units? Made from steel.
- Drilling rigs? Made from steel.
- All those pumpjacks moving up and down across the landscapes of the Permian Basin, the Eagle Ford Shale region and the Bakken Shale? Made from steel.
- The Dakota Access, Keystone XL, Colonial, Transco and every other oil or natural gas pipeline constructed anywhere on the face of the earth? Made from steel.
- Those massive deepwater platforms being fabricated at Ingleside, Texas? Made almost entirely from steel.
- Those gigantic ships exporting crude oil out of Houston and Corpus Christi and LNG from Sabine Pass? Made from steel.
- Those oil refineries arrayed along refinery rows in New Orleans and Pittsburgh and Houston and Corpus? Made almost entirely of steel.
The full article goes into more detail on how proposed steel and aluminum tariffs will impact the industry. So, is it accurate to state: No steel, no oil, no gas. It really is that simple.
“No steel, no oil, no gas. It really is that simple.” Well, it’s a little more complicated than that. It will certainly impact rising costs for all facets – upstream, midstream and downstream, but single-handedly drive the industry into a bust cycle – I don’t see it. Maybe just keeps it around the $60-$70 range for longer.
Agreed that it’s not that simple.
But I would be happy if oil could be stable in the $60-$70 range for the next few years.
This article seems to be rather ‘US-centric’. There are oilfields outside of the US.. The shale players are so heavily in debt that I doubt that a few more bucks for ‘steel’ is going to bother them much.