World Oil survey: Trump administration would have to impose U.S. import tariff

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Yesterday (March 26), our discussion centered on whether some form of import fee would stabilize and perhaps increase U.S. domestic drilling. In response to the question, “Do you think that some form of import fee would stabilize, and perhaps increase, U.S. domestic drilling?”, 48.4% of respondents answered yes, 30.8% said no, and 20.8% were unsure. Among just operators, 48.0% said yes.

We also revealed how respondents, when asked if they thought a fee would prompt their company, or their customers to increase U.S. drilling, there was less certainty: 33.3% said Yes; 31.1% No; and 35.6% unsure. Among operators, the percentages were very similar.   

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Who will implement a U.S. import fee? On survey question 7, we as respondents whether it would be Congress or the Trump administration that would actually put an import fee into effect. Not surprisingly, it was fairly clear-cut in the overall group of operators, equipment/service firms, drilling/workover contractors, engineering firms and consultants: Congress, 9.1%; Administration, 64.5%; Unsure, 26.4%. Among just operators, it was: Congress, 8.5%; Administration, 66.4%; Unsure, 25.1%.

Does Trump understand upstream industry problems? Just to round out attitudes and perceptions, we asked respondents whether President Trump “fully understands the problems of the U.S. domestic E&P industry.”      

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So, in summation, while a near majority of U.S. professionals believes that an import fee could stabilize and perhaps improve domestic drilling as a whole, there is less certainty when the question is applied to their own individual companies and/or customers. Some of this may be due to great uncertainty being caused by operators continuing to revise and slash capital budgets, plus the lack of any certainty as to when the U.S. economy will begin to recover from the Coronavirus.

WorId Oil will release remaining results from this survey on its website tomorrow, March 26, which will cover potential responsiveness and attitudes of the Trump Administration and Congress on an import fee.

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