President Trump’s promise during last year’s election to make it far easier to drill for oil and gas thrilled energy executives who believed his policies would lower their costs and help them make a lot more money.
Those hopes are now fading. Thanks to Mr. Trump’s tariffs, the oil and gas industry is contending with rising prices for essential materials like steel pipes used to line new wells.
That has not yet translated into a meaningful change in U.S. drilling activity or production expectations, but companies have begun revising budgets to reflect higher materials costs. Decisions made today about which wells to drill will affect production many months from now.
Oil refineries are separately bracing for a tariff on Canadian oil, which some of them need to produce gasoline, diesel and other fuels.
At the same time, consumers have grown jittery about the economy and the price of oil has fallen about 10 percent since just before Mr. Trump took office, to around $70 a barrel. Oil companies tend to drill less when prices fall.
The combination could complicate Mr. Trump’s stated desire to juice U.S. oil and natural gas production, which is already at or near record highs.