Trump’s tariffs threat hits Canada’s oil and gas drillers

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

Trump’s tariffs threat hits Canada’s oil and gas drillers

Canada’s oilfield drilling and services sector is already showing signs of slowing due to U.S. President Donald Trump’s threatened tariffs, triggering fears that an expected industry rebound could stall if such levies go forward.

Employment levels in the ********* drilling sector collapsed between 2014 and 2020 due to sustained low oil prices and reduced production during the COVID-19 pandemic.

Activity has improved since 2020, but Trump’s threat to impose a 10 per cent tariff on the 4 million barrels per day (bpd) of ********* crude imported into the U.S. could upend that, industry representatives said.

When volatility affects oil markets, oilfield service companies are often the first hit as their oil producer customers look to delay or defer spending.

Precision Drilling, Canada’s largest drilling rig operator, saw a steeper-than-expected slowdown in its ********* well servicing segment in the fourth quarter of 2024.

Story continues below advertisement

“It seems that some of the tariff uncertainty slowed down customer decision-making,” said CEO Kevin Neveu during a conference call last month.

A recent report from the investment bank TD Cowen predicted ********* oil producers will “err on the side of conservatism” due to uncertainty over tariffs.

Global News

A TD Cowen report from February predicted ********* oil producers will “err on the side of conservatism” due to uncertainty over tariffs.

This is the hidden content, please

• Sign In
• or
• Sign Up

/applications/core/interface/js/spacer.png">

Get daily National news

Get the day’s top news, political, economic, and current affairs headlines, delivered to your inbox once a day.

Analysts at the bank reduced their 2025 ********* rig count forecast by about 5 per cent as a result, to average 175 active rigs versus a prior projection of 185 rigs.

TD Cowen also downgraded its recommendation for two ********* drilling stocks — Precision Drilling and Ensign Energy Services — from “buy” to “hold.”

“I know that certainly the anxiety level is rising,” said Mark Scholz, president of the ********* Association of Energy Contractors (CAOEC), in an interview.

Story continues below advertisement

“Any sort of investment reduction will have an immediate and very, very quick effect on our industry.”

Scholz emphasized the slowdown thus far has been small, involving “just a handful” of rigs.

He attributed it to uncertainty within the broader ********* oil industry about the timing, duration and market impacts of tariffs.

While a 10 per cent tariff on ********* oil is not likely to immediately impact most oil producers’ plans, at least near-term, smaller companies could get hit, warned DaneGregoris, managing director with Enverus Intelligence Research.

“A lot of (oil company) budgets are pretty set up at this point and disclosed. They might be hitting the low-end of their (forecast) ranges, but I can’t imagine massive changes to capital budgets,” he said.

This is the hidden content, please

• Sign In
• or
• Sign Up

/applications/core/interface/js/spacer.png">

2:01
Trump has threatened a 10% tariff on ********* oil – how will it impact the industry?

Still, there are other concerns among producers, including the possibility of retaliatory tariffs by Canada, which would raise the prices of inputs and drilling rig equipment imported from the U.S., said Gurpreet Lail, president of industry group Enserva.

Story continues below advertisement

Sand, for example, is among the items the ********* government has identified on its list of proposed counter-tariffs.

Sand is used heavily by the oil and gas industry in the hydraulic fracturing, or fracking, process.

If tariffs do come into effect, said Lail, it will likely mean job losses in a sector that still has not recovered to where it was a decade ago.

Last year, total employment in Canada’s drilling sector was approximately half what it was in 2014.

CAOEC’s November 2024 forecast had projected 2025 would see the sector’s highest level of employment in ten years, but Lail said that is now in doubt.

“We thought we had finally seen a light coming at the end of the tunnel here, and people were getting back to work,” she said. “But this is not good news.”

This is the hidden content, please

• Sign In
• or
• Sign Up

/applications/core/interface/js/spacer.png">

3:52
Reciprocal tariff impacts on Canada

This is the hidden content, please

• Sign In
• or
• Sign Up

#Trumps #tariffs #threat #hits #Canadas #oil #gas #drillers

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up