Trump tariff reversal could cut costs for US energy firms but will likely leave broader flows unchanged

Published Sat, Feb 21, 2026 · 10:41 AM

[HOUSTON] The US Supreme Court’s Friday (Feb 20) decision to strike down trade tariffs imposed by President Donald Trump last year may ease costs for some oil producers and drillers, but experts and analysts told Reuters that broader energy flows would likely remain unchanged for now.

The court’s ruling could reduce the cost of building liquefied natural gas (LNG) plants and other large-scale energy infrastructure that rely on modules and other parts manufactured in foreign countries hit by tariffs. Venture Global, for example, builds its LNG plants piecemeal in Italy before importing the components into the US for final assembly.

Trump’s tariffs raised costs for US crude producers and service companies up the value chain, hitting imported equipment and materials. Many absorbed the additional costs; others tried to pass them on to customers.

Venture Global did not immediately respond to a request for comment.

“We were forecasting that we would have to pay around US$5 to US$6 million in tariff taxes in 2026, so that number will come down, hopefully,” said Cam Hewell, president and chief executive of Premium Oilfield Technologies, which manufactures and sells spare parts and equipment to oilfield companies.

“We had to eat about 90 per cent of the tax increase, so it won’t have a big impact on what we charge customers. But it will free up more cashflow for R&D, employee raises and cash back to investors,” he added.

The ruling could also help companies budget more precisely and better understand drilling costs, said Kirk Edwards, president of Texas-based producer Latigo Petroleum.

The Supreme Court’s decision did not remove 50 per cent tariffs on steel and aluminum imposed last year. Some executives remain wary the administration could find ways to maintain tariff costs.

“I have some fear that the administration will quickly bypass Congress and cook up another tariff scheme that mimics the current one… and never change the amounts we have to pay,” Hewell said.

Trump suggested as much himself, saying he would impose a 10 per cent global tariff for 150 days.

“We have alternatives, great alternatives,” Trump said.

LNG flows likely to remain unchanged

While the court’s ruling will theoretically reduce the cost of constructing LNG plants, it is unlikely to result in China taking in more LNG from the US because of simple economics, said Ira Joseph, a senior research associate at Columbia University’s Center on Global Energy Policy.

“It makes more sense for China to continue to trade on US LNG to Europe to make an arbitrage on the shipments or import cheaper oil-indexed LNG from the Middle East,” Joseph said. “Beijing now treats its LNG market as strategic leverage with the US, and no LNG purchases were agreed as part of the deal late last year.”

“Beijing is unlikely to offer purchases or make concessions, even if tariffs now ease,” said Alex Munton, director of global gas and LNG research at consulting firm Rapidan Energy.

“If this administration has proven anything, it’s that it is extremely resourceful in trying to get its agenda accomplished, they will look for alternative options,” said Samantha Santa Maria-Hartke, head of market analysis at Vortexa.

China, which stopped taking deliveries of US crude and LNG after it imposed its own retaliatory tariffs against the US, would not likely reverse course, she added. REUTERS