Tungsten: Chinese Export Control in Response to Tariffs Drives Up Oil & Gas Drill Bit Costs

     China has used its critical minerals mining and processing leverage before and continues to do so, especially to counteract Trump tariffs.

     According to Reuters:

“Tungsten makes up as much as 75% of the drillbits deployed in oilfields. The metal's price has surged to over $600 per metric ton unit from around $330–$340 in early February, when Trump imposed a 10% tariff on Chinese goods and Beijing hit back with curbs on exports of five critical metals, including tungsten.”

     The largest use of tungsten is as tungsten carbide in cemented carbides, also known as ‘hardmetals.’ They are used as wear-resistant materials by the metalworking, mining, and construction industries. The graph below shows the prices of tungsten to June 2025 at $450 per metric ton, but does not reflect the recent increases above $600 per metric ton.

     According to the USGS, China controls about two-thirds of global tungsten production. The tariff retaliation prices are affecting PDC drill bit costs in the U.S.

     According to Reuters:

“As a result, polycrystalline diamond compact (PDC) drill bits, typically priced at $20,000 to $100,000 depending on their size, design and other factors, now cost an additional $3,000 to $25,000, said Yaseer Ismail, a former oilfield services executive and supply chain expert.”

     The DOE noted that they gave a grant to Texas company Melt Technologies, an industrial metals reclamation and recycling firm, to fund a pilot facility to produce tungsten carbide products. The grant actually happened in the last days of the Biden administration.

     Oilfield service companies (OFSs) have indicated that they will have to absorb the tungsten price increases just as they have absorbed the steel cost increases. Combined with anticipated pressure on oil prices, the OFS sector, which includes giants like SLB and Halliburton, is expecting continued drops in profits.  

   

 

References:

 

Analysis-Rising tungsten prices worsen oil drillers' inflation worries. Anushree Mukherjee and Shariq Khan. Reuters. October 8, 2025. Analysis-Rising tungsten prices worsen oil drillers' inflation worries

Tungsten Statistics and Information. National Minerals Information Center. U.S. Geological Survey. Tungsten Statistics and Information | U.S. Geological Survey

Mineral Industry Surveys: Tungsten in June 2025. USGS. Tungsten in June 2025