Yesterday, news outlets throughout the US reported that domestic oil barrel prices had hit the $70 per barrel mark for the first time in four years; the strength in oil prices has largely been attributed to decreased global oil output.
But today’s news that Donald Trump will pull out of the Iran Nuclear Deal could hinder the country’s oil sales by an estimated 300,000 to 600,000 barrels per day. Although the reimplementation of sanctions could take time, removing that oil from the global supply could push prices upward. And while higher oil prices is good news for the US energy pipe markets, the belief that there will be OCTG supply shortages toward the end of the year is still a large concern.
“The decision on Section 232 quotas likely forces Nexteel and Hyundai to consider finally building mills here, or elsewhere to get around the tariffs, although that strategy is hindered by the potential 25 percent duties that will impact places like Thailand,” a source said.
In terms of current domestic pricing for US J55 ERW casing, that continues to span between $60-$70 cwt. ($1323-$1543/mt or $1200-$1400/nt), ex-mill, depending on tonnages, although it’s largely believed that prices could spike toward the end of the year.
Looking offshore, the most recently heard J55 ERW OCTG casing pricing from Taiwan in the US domestic market was heard in the range of $50.00-$51.25 ($1102-$1130/mt or $1000-$1025/nt), DDP loaded truck in US Gulf coast ports, which includes the current Section 232 tariff.