Canada’s drilling and oil field services are already showing signs of slowdown due to the threatened tariffs by US President Donald Trump, which arouses fears that a rebound in the expected industry can stall if such samples are progressing.
The employment levels in the Canadian drill sector collapsed between 2014 and 2020 due to the low prices of sustained oil and reduced during the COVVI-19 pandemic.
Activity has improved since 2020, but Trump’s threat to impose a 10% price on the 4 million barrels per day (BPD) of Canadian crude imported to the United States could upset this, industry representatives said.
When volatility affects oil markets, petroleum service companies are often the first time because their oil producing customers seek to delay or postpone expenses.
Drilling precision, the largest Canada drilling platform operator, has experienced a steepecity more steep than expected in its Canadian well segment of well in the fourth quarter of 2024.
“It seems that a part of the tariff uncertainty has slowed customer decision -making,” CEO Kevin Neveu said at a conference on last month.
A recent report by the TD Cowen investment bank predicted that Canadian oil producers “will be mistaken on the side of conservatism” due to uncertainty about prices.
Global News
A February Cowen TD report predicted that Canadian oil producers “will be mistaken on the side of conservatism” due to the uncertainty about the prices.
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Bank analysts have reduced their forecasts for Canadian platform accounts by 2025 by around 5%, for an average of 175 active platforms compared to a prior projection of 185 platforms.
TD COWEN has also lowered its recommendation for two Canadian drilling actions – branding and teaching drilling services – to “buy” to “hold”.
“I know that the level of anxiety certainly increases,” said Mark Scholz, president of the Canadian Association of Energy Entrepreneurs (CAOEC), in an interview.
“Any kind of investment reduction will have an immediate and very, very fast effect on our industry.”
Scholz stressed that the slowdown so far has been small, involving “just a handful” of platforms.
He attributed it to uncertainty within the broader Canadian petroleum industry on the calendar, duration and impacts of the prices market.
While a 10% tariff on Canadian oil is unlikely to have an impact immediately in terms of most oil producers, at least in the short term, small businesses could be affected, warned dune
Gregoris, CEO Intelligence Intelligence Research.
“Many budgets (oil companies) are quite set up at this stage and disclosed. They could reach the low-end of their ranges (forecasts), but I cannot imagine massive changes in investment budgets, “he said.
However, there are other concerns among producers, including the possibility of reprisal prices by Canada, which would increase the prices of imported inputs and platform equipment from the United States, said Gurpreet Lail, president of the Ennéva industry group.
Sand, for example, is one of the elements that the Canadian government has identified on its list of proposed counter-triggers.
Sand is strongly used by the petroleum and gas industry in the hydraulic fracturing or fracturing process.
If prices come into force, said Lail, this will likely mean job losses in a sector that has not yet recovered where it was ten years ago.
Last year, total employment in the Canada drilling sector was about half of what it was in 2014.
The November 2024 CADO forecasts had planned that 2025 would see the highest level of employment in ten years, but Lail said it was now in doubt.
“We thought we had finally seen a light reaching the end of the tunnel here, and people turned to work,” she said. “But that’s not good news.”
