Prices for oil and gas OCTG pipes in the US rose by 13% in May

Regional pipe markets are seeing mixed trends, reflecting the specific characteristics of pipe products. By the end of May, prices for welded pipes in Turkey, intended for construction purposes, had fallen slightly, whilst quotations for oil and gas OCTG pipes in the US had once again jumped by almost $290 per tonne — to $2,563/t.

USA

US oil producers have once again realised that high oil prices are not a short-term trend. Companies are ramping up production to capitalise on the sharp rise in prices caused by the war with Iran. Companies such as Diamondback, the third-largest oil producer in the US, and Continental Resources, which specialises in shale oil production, have announced an expansion of drilling operations in response to the sharp rise in oil prices of more than 40%. In particular, Continental Resources plans to increase capital expenditure by approximately $300 million, to $2.8 billion in 2026.

These plans have once again pushed pipe prices upwards. Average quotations for OCTG pipes on North America FOB terms in late May–early June rose by a further $289 per tonne, to $2,563/t. However, for almost the entire previous month, prices remained stable at $2,274/t following an April rise of $220 per tonne. Since late February, the price of P110 casing in the US has increased by 24.8%.

Trends in the number of active drilling rigs in the US are also beginning to indicate a rise in drilling investment. According to Baker Hughes, the number of oil and gas rigs in the US, which is an early indicator of future production, stood at 562 at the end of May, an increase of 15 units over the month. The number of active rigs in the US has been rising for six consecutive weeks, the longest streak in the last four years.

At the same time, WTI prices were extremely volatile throughout May: in the middle of the month, the price rose above $108/barrel, but fell sharply by the end of the period. At the end of the month, WTI closed at around $87.4/barrel, which is approximately 17% lower than at the end of April. The main drivers of volatility were geopolitical risks surrounding the Middle East and the situation in the Strait of Hormuz.

According to forecasts, the sharp rise in oil prices will lead to an increase in US production of 410,000 barrels per day in the first quarter of 2027 and a record level of 14.2 million barrels per day by the end of 2027. However, the expansion of drilling in the US will not offset the loss of 12 million barrels of oil per day in global supplies caused by the closure of the Strait of Hormuz.

Sangsang Certification Corporation forecasts that the impact of rising prices for steel OCTG pipes in the US will affect the profitability of the American pipe industry from June onwards. The recovery in drilling volumes in the US and rising raw material prices remain supportive factors.

It is worth noting that imports of OCTG pipes into the US in March fell by 19% month-on-month to 93.7 thousand tonnes. South Korea was the largest exporter during this period, with 22.6 thousand tonnes (compared to 54 thousand tonnes in February). In the same month of March, exports of OCTG pipes from the US rose by 28% month-on-month to 15.3 thousand tonnes. The US shipped the largest volume of products to Canada in March — 9.7 thousand tonnes (8.2 thousand tonnes in February).

Turkey

According to Kallanish, prices for welded pipes fell by $5 in May to $653/t (Turkey FOB) following a sharp rise of $60 in March. Weak demand provides no grounds for price increases, whilst some suppliers are dumping, offering lower prices — from $640/t FOB.

A similar price trend was observed for raw materials used in the production of welded pipes — hot-rolled coil (HRC). Average quotations for hot-rolled coil (HRC) on Turkey FOB terms fell by $5 in May to $625/t.

It should be noted that by the end of April, prices for welded pipes in Turkey intended for construction purposes had virtually stabilised, whilst quotations for oil and gas OCTG pipes in the US rose by $220 to $2,274/t.