Oil drilling giants start tallying tariff drag
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Annelise Capossela/Axios
Two of the world's largest oilfield services companies — Halliburton and Baker Hughes — have offered specifics on how they see tariffs hitting their business.
Why it matters: Trade wars are a double threat for oil producers and their contractors.
- Tariffs bring higher project costs while their economic toll weighs on oil prices and demand growth.
Oilfield service companies are particularly concerned that President Trump's tariffs on imported steel and parts will drive up equipment costs and disrupt supply chains.
Driving the news: Baker Hughes estimated that tariffs would bring a rather manageable $100 million to $200 million hit to its 2025 net earnings.
- But the tally, in an investor deck on Tuesday about Q1 earnings, comes with a big asterisk.
- It's based on rates in effect during the 90-day White House "pause" on much higher global tariff rates that Trump unveiled April 2.
- The firm said it is "monitoring secondary trade policy effects on GDP, energy demand and customer behavior."
Halliburton told analysts on Tuesday that it's expecting tariffs to knock 2-3 cents per share off its earnings next quarter.
- North American customers are "in the midst of evaluating their activity scenarios and plans for 2025," CEO Jeff Miller told analysts. Reuters has more.
Yes, but: Both companies expressed optimism about weathering the storm as they reported Q1 earnings Tuesday.
- "We are doing a lot of work on mitigating the impact of tariffs," Halliburton CFO and executive VP Eric Carre said on the company's earnings call.
- "Although our outlook is tempered by broader macro and trade policy uncertainty, we remain confident in our strategy and the resilience of our portfolio," Baker Hughes CEO Lorenzo Simonelli said in a statement.
The big picture: The firms operate internationally and across industry segments, which provides some protection.
- For instance, Baker Hughes' deck notes that "gas and LNG tailwinds prevail over growing macro uncertainty."
What we're watching: The unpredictable path of White House trade policy.
- Oil has rebounded lately and got another lift Tuesday when Trump and Treasury Secretary Scott Bessent signaled de-escalation with China.
- The global benchmark Brent crude is trading at $66.76 per barrel this morning, up from the low $60s earlier this month.
