Editor’s note: This issue was written ahead of the news that the Trump administration tariffs would be paused for 90 days for all countries except China.

Crude oil prices have dropped 16% since April 1. Oil at $60 per barrel has significantly different implications compared to oil at $75. The commodity has fallen on the fears that tariffs will significantly damper oil demand. Let’s examine the different energy sectors to see how extended tariffs could affect the stocks.

Upstream energy covers the companies that drill and produce crude oil and natural gas. These companies face the most potential losses with lower-for-longer energy commodity prices. VettaFi ETF Trends recently reported that producers need at least $65 WTI oil to drill new wells profitably.

An extended period of $50 to $60 oil will seriously reduce the level of new drilling, which gets us to the adage that the cure for low prices is low prices. Look for the most efficient producers, like Devon Energy (DVN), for upstream energy exposure.

Midstream energy producers operate pipelines, storage facilities, and natural gas processing plants. These companies primarily provide midstream services on long-term, fee-based contracts. Also, most midstream assets are located in the U.S. The bottom line is that midstream revenues are not subject to tariffs and are secure. Midstream stocks pay attractive and growing dividends. Prominent companies include Kinder Morgan (KMI), Williams Companies (WMB), and Enterprise Product Partners (EPD). When the market drives down midstream share prices, it’s a good time to pick up shares.  As one former Houston Natural Gas executive told The Guardian in 2002, “All [pipelines] do is make money. It’s boring, but it’s dependable.”

Upstream companies distill crude oil into fuels such as gasoline and jet fuel. The market for refined products is global, so that exports could be subject to tariffs from other countries, and imports could be subject to U.S.-imposed tariffs. In 2024, the U.S. exported $117 billion of refined products, making us the number-three exporter globally. The U.S. also imported $55.7 billion worth of refined products. Low prices for crude oil tend to improve profits for fuels. The large amount of exports and imports indicates that fuel trading could see products finding new homes depending on the landed costs, including tariffs. The U.S. has three large. Pure play refining companies: Marathon Petroleum Corp. (MPC), Phillips 66 (PSX), and Valero Energy Corp. (VLO). I am a fan of all three companies.