• 4 minutes Energy Armageddon
  • 6 minutes "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 12 minutes "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 3 days Is Europe heading for winter of discontent with extensive gas shortages?
  • 1 day Wind droughts
  • 4 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 2 days Kazakhstan Is Defying Russia and Has the Support of China. China is Using Russia's Weakness to Expand Its Own Influence.
  • 2 days Oil Prices Fall After Fed Raises Rates
  • 12 days How Far Have We Really Gotten With Alternative Energy
  • 4 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 10 days "Russian oil executive and Putin critic Ravil Maganov dead after mysterious six-story fall" - The New York Post
  • 2 days 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 7 days Beware the Left's 'Degrowth' Movement (i.e. why Covid-19 is Good)
  • 10 days The Federal Reserve and Money...Aspects which are not widely known
Russia's Snap Referendums In Ukraine Begin

Russia's Snap Referendums In Ukraine Begin

Russia has begun its rushed…

Putin Is Not Peter The Great

Putin Is Not Peter The Great

As unrest within Russia intensifies…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Steel Shortage Adds To U.S. Shale Drillers’ Woes

  • War in Ukraine affects steel goods exports from both Ukraine and Russia.
  • Shortage of steel tubing for wells has become the latest production constraint for U.S. shale.
  • For U.S. oil drillers, steel tubing prices and scarcity is one more thing to worry about on top of rising oilfield services costs.

U.S. shale oil drillers are complaining of a shortage of steel tubing for wells, which is contributing to stagnation in production.

In a Friday report, Bloomberg cited data from KeyBanc Capital Markets, which showed that the price for pipes used in the oil industry—oil-country tubular goods—had shot up to $2,400 per ton in March.

This was a 100-percent increase on the year the report noted and was driven by concern that the war in Ukraine would affect steel goods exports from both Ukraine and Russia.

“I cannot think of a time prior to this that I’ve seen the market this tight,” Susan Murphy, publisher of the OCTG Situation Report, which follows the steel sector, told Bloomberg. “Everybody is really trying, at least in the tubular goods industry, to manage practically an unmanageable situation.”

Russia is the world’s fifth-largest steel producer and Ukraine is in the top 20. Together, the two supply a fifth of Europe’s steel, but as with oil, the steel market is global, and price increases have global effects. To date, the war has tightened the market with a 20-percent drop in Russian and Ukraine finished steel exports to Europe.

For U.S. oil drillers, steel tubing prices and scarcity is one more thing to worry about on top of rising oilfield services costs, difficulty in workforce retention, which has necessitated wage boosts, and a shortage of other essential commodities such as frac sand.

Steel, however, seems to be a particularly acute problem and one that didn’t start a month ago with Russia’s invasion of Ukraine.

“The largest cost increase over the past 12 months for the oil and gas industry is from tubular steel,” one energy industry executive told the Dallas Fed in its quarterly industry survey. “Steel availability and pricing are also delaying quick activity ramp-up among several operators. This is impairing the ability to bring production online faster.”

By Irina Slav for Oilprice.com

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News