Recent US tariff policies are sending shockwaves through global energy markets, with profound implications for the oil, gas, and power sectors. According to Wood Mackenzie's latest Horizons report, these tariffs are not merely policy tweaks but are driving fundamental shifts in trade flows, project economics, and investment strategies worldwide.

In the oil sector, slower global economic growth linked to trade friction is weakening demand forecasts, particularly in emerging markets. This softer demand is impacting US Lower 48 supplies and refining margins, with the latter bearing the brunt of the downturn. Meanwhile, the gas and LNG sector faces heightened risks of oversupply as new LNG projects come online amid tariff-related cost increases. These dynamics are complicating the economics of US LNG developments and prompting buyers in Europe and Asia to reassess long-term contract commitments.

The power and renewables sectors are also feeling the pinch. Tariffs on critical equipment like solar panels, wind turbines, and battery components are driving up project costs, affecting everything from utility-scale solar farms to grid-scale storage deployments. Policy uncertainty is further delaying investment decisions, even as the long-term demand for clean energy remains robust.

With trade policy uncertainty showing no signs of abating, energy market participants must prepare for multiple scenarios. These could range from constrained supply and high prices to prolonged demand weakness and subdued investment. Strategic planning for such divergence is now a necessity for traders and investors alike.

For a deeper dive into sector-specific impacts and projections, Wood Mackenzie's Horizons report offers detailed analysis and actionable insights.