The Canadian oil field services and services sector is already showing signs of deceleration due to the threatened tariffs of the president of the United States, Donald Trump, which causes fears that an expected rebound of the industry can stop if such levies advance.
Employment levels in the Canadian drilling sector collapsed between 2014 and 2020 due to low sustained oil prices and reduced production during COVID-19 pandemic.
The activity has improved since 2020, but Trump's threat to impose a 10 percent rate at 4 million barrels per day (BPD) of Canadian crude imported to the United States could fly that, they said representatives of the industry.
When volatility affects oil markets, oil services companies are often the first success, since their oil -producing customers seek to delay or defer spending.
Precision Drilling, the largest drilling platform operator in Canada, saw a more pronounced deceleration of what was expected in its Canadian well service segment in the fourth quarter of 2024.
“It seems that part of the tariff uncertainty slowed the client's decision -making,” said CEO Kevin Neveu during a telephone conference last month.
A recent report by the TD Cowen investment bank predicted that Canadian oil producers “will err on the side of conservatism” due to uncertainty about tariffs.
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A February Cowen report predicted that Canadian oil producers “will err on the side of conservatism” due to uncertainty about tariffs.
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Bank analysts reduced their 2025 Canadian platform counting prognosis in approximately 5 percent as a result, to the average of 175 active platforms versus a previous projection of 185 platforms.
TD Cowen also degraded his recommendation for two Canadian drilling stocks, precision drilling and Ensign services of Ensign, “buy” to “Hold.”
“I know that certainly the level of anxiety is increasing,” said Mark Scholz, president of the Canadian Energy Contractors Association (CAOEC), in an interview.
“Any type of investment reduction will have an immediate and very fast effect on our industry.”
Scholz emphasized that the deceleration has so far been small, which implies “only a handful” of platforms.
He attributed it to uncertainty within the broader Canadian oil industry about the moment, duration and impacts of the rates market.
While it is not likely that a 10 percent tariff on Canadian oil immediately affects most oil producers plans, at least in the short term, smaller companies could be beaten, Dane warned
Gregoris, managing director of Enverus Intelligence Research.
“Many budgets (of the oil company) are quite configured at this time and reveal. They can be reaching the low range of their ranges (forecasts), but I can't imagine massive changes in capital budgets, ”he said.
Even so, there are other concerns among the producers, including the possibility of retaliation rates by Canada, which would raise the prices of inputs and the perforation platform equipment imported from the United States, said Gurpreet Lail, president of the Grupo de the Industry Reserva.
Sand, for example, is among the articles that the Canadian government has identified in its proposed counter-tarifa list.
The sand industry is strongly used by the oil and gas industry in the hydraulic fracture or fracking process.
If the tariffs enter into force, said Lail, will probably mean losses of employment in a sector that has not yet recovered where he was a decade ago.
Last year, total employment in Canada's drilling sector was approximately half of what it was in 2014.
The November 2024 prognosis had projected that 2025 would see the highest level of employment in the sector in ten years, but Lail said he is now in doubt.
“We thought we had finally seen a light at the end of the tunnel here, and people returned to work,” he said. “But this is not good news.”
