A report published by Deloitte revealed that the broad U.S. tariffs imposed by President Donald Trump are expected to increase operating costs, disrupt supply chains, and weaken investment momentum in the oil and gas industry by 2026.
The energy sector relies heavily on global supply chains, with internationally sourced materials such as drilling rigs, valves, and specialized steel being essential for operations.
According to the report, U.S. tariffs on these components and other key materials — including steel, aluminum, and copper — could raise material and service costs across the value chain by 4% to 40%, putting additional pressure on the industry’s profit margins.
The United States has imposed tariffs on a wide range of imports, including 10–25% on raw materials not covered by the US-Mexico-Canada Agreement (USMCA), and 50% on steel, aluminum, and copper.
Deloitte noted that these tariffs could reshape the cost structure of the oil and gas industry and create uncertainty regarding raw material sources.
Rising inflation and financial uncertainty caused by the tariffs may lead to delays in final investment decisions and offshore projects worth more than $50 billion, pushing their implementation to 2026 or beyond.
As a result, operators may struggle to recover from higher costs, ultimately weakening investment activity in the sector, the report warned.
With input costs increasing and flowing through the value chain via price adjustments, Deloitte expects oil and gas companies to renegotiate contracts — particularly escalation and force majeure clauses — to better manage risk and limit exposure to volatility.
The report added that ongoing disruptions could prompt companies to prioritize supply chain resilience over low-cost sourcing, shift toward domestic or tariff-exempt suppliers, and utilize foreign trade zones or tariff reclassification strategies to better manage tariff impacts.
