TotalEnergies Flags Rising Steel, LNG Costs from Trump's Tariffs; Exxon Sees Limited Effect

At the Energy Intelligence Forum, TotalEnergies warned that higher U.S. steel tariffs are inflating LNG project costs, while ExxonMobil’s CEO said short-term trade policies won’t alter the company’s long-term investment plans.

(Reuters) — The executives of two oil companies warned this week that tariffs resulting from the U.S. administration's trade policies were driving up costs across the energy production chain and affecting investment decisions.

TotalEnergies CEO Patrick Pouyanne told the Energy Intelligence Forum in London on Oct. 14 that tariffs on steel were pushing up costs for liquefied natural gas (LNG) projects.

In June, Trump signed an executive proclamation hiking tariffs on steel and aluminum imports to 50%.

Lorenzo Simonelli, chief executive of energy services company Baker Hughes BKR.O, told the same conference on Monday that tariffs would add between $100 million and $200 million to the company's costs this year, though probably closer to the lower end of that range.

“It is an incremental pressure point, but it’s something that we have to manage through,” he said.

However, Darren Woods, chief executive of U.S. major ExxonMobil downplayed the impact of policies pursued by any single administration, saying the group's long-term investments were not affected by one political cycle.

Instead, he flagged Europe's environmental regulations as a factor driving away investment.

"The challenge in Europe is that they try to micromanage and instruct the industry on how to achieve (decarbonization)," Woods told the conference on Oct. 13. "Frankly, they don't have the expertise."