By Stephen Nakrosis

Liberty Energy Inc. said North American producers are evaluating a range of macroeconomic scenarios, as global oil markets contend with tariff impacts, geopolitical tensions and oil supply concerns.

While the pause on tariffs has momentarily eased pressure on the global economy, markets remain focused on supply-side dynamics, the company said, adding natural-gas fundamentals are more favorable on rising LNG export capacity demand.

"While the current tumult in commodity prices is not immediately driving changes in North American activity, we expect oil producers are evaluating a range of scenarios in anticipation of oil price pressure," the energy services company said. "Concurrently, gas producers could prove to be beneficiaries of potentially lower associated gas production in oily basins."

On outlook:

Ron Gusek, Liberty's chief executive, said tariff announcements and a more aggressive OPEC+ production strategy have sent ripples across the energy sector, and added, "Today, we have excess demand for Liberty services."

Gusek added, "In contrast to prior oil and gas cycles, recent years have seen steadier activity in both higher and lower commodity price environments." Larger, well-capitalized producers comprise a larger portion of shale production today, he said, and they are better able to withstand a broader range of commodity prices.

"Today's frac activity simply supports maintenance of current oil production levels, mitigating the possibility of steep declines experienced by the service industry in past cycles," Gusek said.

Since the pandemic-driven downturn, the energy sector has seen significant consolidation, a strong focus on capital discipline and balance sheet strength, with most producers targeting flat to modest production growth, according to Gusek.

"While macroeconomic risk could lead to lower oil production in North America, the industry is operating from a higher base of production today than prior cycles, implying a decline in service activity would likely be less pronounced than in the past," Gusek added.

He also said Liberty is seeing growing power demand from data centers, manufacturing, mining, and industrial electrification, which is enabling the company to expand power services beyond the oilfield.

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

April 16, 2025 19:03 ET (23:03 GMT)

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