Analysis by Energy Workforce President Tim Tarpley
U.S. crude prices hovered below $60 this week as OPEC+, the eight major worldwide oil and gas producers led by Saudi Arabia, agreed to hike production for the second month. The new hike will be for another 411,000 barrels a day in June, the same hike in production that occurred for the month of May. This hike was more than some analysts expected, with Goldman Sachs forecasting a hike of only 140,000 bpd.
With oil prices likely to remain in this range for the near future, the continuing impacts of tariffs on the cost of production become even more impactful. The Administration continues to move forward on working on bilateral agreements with a number of countries, which could help alleviate the impact of tariffs. Still, movement on a broader settlement seems to be far away. During a meeting at the White House on Tuesday between President Trump and Canadian Prime Minister Mark Carney, President Trump reiterated his intention to maintain the prospect of tariffs with Canada, indicating that at this point, there was nothing that could be done on the Canadian side to remove them completely. The President also said after the meeting that he would be involved in the specifics of any trade deal, and it would move to the point of yes or no. Currently, many, but not all, OFS goods coming in from Canada can avoid the 25% reciprocal tariffs if they qualify under the USMCA exemption.
Meanwhile, on Capitol Hill, Treasury Secretary Scott Bessent told lawmakers on the House Appropriations Committee that there were ongoing discussions with 18 countries and a deal could be announced this week. He also added that he expects 80-90% of the deals with our closest trading partners could be announced by the end of the year. Energy Workforce will continue to advocate for a “critical energy component” exemption and other more specific targeted exemptions.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
