US oil, gas activity rose in first quarter, but energy execs wary of tariffs, Dallas Fed says

By Curtis Williams and Georgina McCartney

HOUSTON (Reuters) - U.S. lipid and state enactment accrued somewhat successful the archetypal quarter, but vigor institution executives were pessimistic astir the sector's outlook, wary of caller commercialized policies from President Donald Trump's administration, a Dallas Fed survey showed connected Wednesday.

Trump has promised to unleash U.S. vigor dominance, declaring a nationalist vigor exigency connected his archetypal time successful office. Yet galore executives surveyed by the Dallas Fed expressed worries astir Trump's committedness to thrust down lipid prices, and said his commercialized and tariff policies could rise drilling costs.

Trump imposed tariffs connected alloy and aluminum connected March 12 and much tariffs could beryllium coming connected April 2. Oil manufacture executives said tariffs could thrust up lipid institution costs for products similar alloy utilized connected drilling sites and successful pipelines.

The imposition of the 25% alloy tariff has led lipid and state companies to estimation a 4% summation successful costs for drilling a well, said Kunal Patel, economist astatine the Federal Reserve Bank of Dallas.

"In a unusual twist to the administration's anticipation for much home lipid and state production, higher alloy tariffs whitethorn effect successful less wells completed owed to higher completion costs," said 1 oilfield services enforcement successful an anonymous survey.

"The administration's chaos is simply a catastrophe for the commodity markets. 'Drill, baby, drill' is thing abbreviated of a story and populist rallying cry. Tariff argumentation is intolerable for america to foretell and doesn't person a wide goal. We privation much stability," said different executive.

The institution outlook scale decreased 12 points to -4.9, suggesting flimsy pessimism among firms, the Dallas Fed survey said. The uncertainty scale was up by 21 points to 43.1.

"This uncertainty is being caused by the conflicting messages coming from the caller administration. There cannot beryllium 'U.S. vigor dominance' and $50 per tube oil; those 2 statements are contradictory," different unnamed enforcement said.

The survey, conducted successful mid-March, included 88 exploration and accumulation companies and 42 oilfield firms operating successful the largest U.S. oil-producing portion that includes Texas, confederate New Mexico and bluish Louisiana.

TARIFF TROUBLES

More than fractional of the oilfield work steadfast executives polled said Trump's import tariffs connected alloy volition pb to a driblet successful request for their services this year.

One enforcement said the tariffs instantly accrued its company's costs for casing and tubing by 25%.

Costs among oilfield work firms roseate faster successful the archetypal 4th of 2025 than successful the 4th fourth of 2024, the survey showed.