Oil and gas activity in US contracted in Q2 due to higher steel tariffs.

Activity in the U.S. oil and gas sector in Texas, Louisiana, and New Mexico slightly contracted in the second quarter of 2025 due to a jump in steel tariffs. U.S. crude futures experienced significant volatility, dropping to a four-year low before rebounding. Oil and gas production decreased slightly, with executives expecting to drill fewer wells.

The recent increase in U.S. steel import tariffs to 50% from 25% has led to concerns among firms, with 27% stating they will drill fewer wells. Executives expressed frustration with the impact of policies and D.C. rhetoric on the domestic energy industry. OPEC and its allies have ramped up output to regain market share.

Despite the Dallas Fed survey results, recent data from the Energy Information Administration showed U.S. crude oil production hitting a record high in April. Costs among oilfield service firms rose at a faster pace in the second quarter, with executives expecting less customer demand. Companies anticipate a challenging environment with multiple negative factors affecting the energy sector.

Read more at Yahoo Finance: Oil, gas activity contracted in Q2 on higher US steel tariffs, Dallas Fed survey shows