Galp's Bold Move: Diversifying to Dodge US Tariffs

Ladies and gentlemen, buckle up! We're diving into the high-stakes world of global energy markets, where one company, Galp Energia, is making a bold move to dodge the potential bullet of US tariffs. This isn't just about survival; it's about thriving in a world where trade wars are the new normal. So, let's get into it!



Galp Energia, the Portuguese oil giant, is confident it can find alternative markets for its gasoline exports if US President Donald Trump imposes those dreaded 25% tariffs on European goods. Why? Because the energy market is global, and gasoline streams are global. This means Galp's production has the flexibility to find its way to different markets. BOOM! That's the kind of confidence we need in these uncertain times.

Now, let's break it down. Galp's refinery in Sines produces about 2 million metric tons of gasoline per year. Between 1.2 million and 1.5 million tons of that usually heads to the United States. But if the US market dries up due to higher prices from those tariffs, Galp is ready to pivot. They've got the experience and the capability to realign their production towards different types of products, depending on prices and demand. This is a company that knows how to dance with the devil in the pale moonlight of global trade disruptions.

But it's not just about finding new markets. Galp is also making a big push towards greener fuels. By mid-2026, they expect to start producing biodiesel and sustainable aviation fuel from waste, like used cooking oil. This isn't just about mitigating the impact of tariffs; it's about future-proofing their business. The 400 million euro Hydrogenated Vegetable Oil (HVO) plant, a joint venture with Japan's Mitsui, will have an annual production capacity of 270,000 tons. That's a game-changer, folks!



Now, let's talk about the numbers. Galp's financial performance over the past year has been nothing short of stellar. They delivered a robust set of results, driven by solid Upstream operating performance and continued supportive Midstream contribution. Their RCA Ebitda reached €720 million, and their adjusted operating cash flow (OCF) was €488 million. That's the kind of financial muscle that gives you the confidence to navigate trade wars.

But it's not all sunshine and roses. There are risks. Realigning the Sines refinery towards different types of products could require significant investments and operational adjustments. And finding alternative markets for gasoline exports may not be straightforward. But Galp has handled trade-related disruptions in the past, and they're ready to do it again.

So, what's the bottom line? Galp Energia's diversification strategy for its gasoline exports is a proactive measure to safeguard its business against the risks posed by potential US tariffs. By leveraging the global nature of the energy market, Galp aims to maintain operational flexibility and ensure the company's resilience in the face of global trade disruptions. This is a company that's not just playing defense; it's playing to win.

So, if you're looking for a company that's ready to take on the challenges of the global energy market, look no further than Galp Energia. They're not just weathering the storm; they're riding the wave to new heights. So, buckle up, folks. The future of energy is here, and it's looking bright!