Steel Tariffs a 'Significant' Hit to Oil Drilling, Conoco Says

(Bloomberg) -- Steel tariffs imposed by the Trump administration are driving a “fairly significant” increase in costs for oil-driller ConocoPhillips, the company said Thursday.

Prices for steel used in pipes, valve fittings and other equipment have risen 26 percent in the U.S. since the start of the year, Executive Vice President Al Hirshberg told analysts on a conference call. The Houston-based company raised its capital budget for the year by a half-billion dollars earlier in the day, partly due to rising costs.

“There’s been a significant move in the market,” Hirshberg said on the call. Conoco spends about $300 million a year on equipment affected by the tariffs, he said.

The warning came two days after Plains All American Pipeline LP appealed to Congress for relief from higher steel prices. The tariffs will add $40 million to the cost of the new pipeline it’s building to the Permian basin in Texas and New Mexico, the country’s biggest oilfield, Chief Operating Officer Willie Chiang said at a July 24 hearing in Washington.

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