With New Mexico oil and natural gas production skyrocketing especially in the Permian Basin and the US as a whole seeing dramatic increases in oil and gas production, we felt it was worth taking stock of how things are going in terms of exports of New Mexico’s most important products and what impacts the Trump Administration’s tariffs might be having.
On the liquefied natural gas (LNG) issue it is first worth noting that the EU recently announced that it would double imports from the US over the next 5 years.
On the other hand, LNG exports to China are dropping precipitously due to the trade war. Overall exports continue to grow, but as the Financial Times, those investing in LNG export facilities may hold off on investing in these facilities due to the escalation in tensions.
In terms of crude oil, despite fluctuating (mostly downward) amounts of exports to China, the overall amount of crude oil exports from the United States continues to skyrocket. All of this is good news for New Mexico’s economy and oil & gas producers.
What will the newly-imposed tariffs mean to the US and New Mexico economies? We don’t like tariffs and believe they will be harmful, but so far, they are not hindering the crude oil and LNG export markets, but that could change at any time.