The Tariff Reversal No One's Pricing Into Energy Capex The Supreme Court's rejection of Trump's tariffs (per ) has immediate capex implications for energy majors that few analysts are connecting to earnings pressure. As of 2025-12, ExxonMobil reported Q4 2025 diluted EPS of $6.70, down from $7.84 in Q4 2024 . More critically, cash and cash equivalents dropped to $10.7B from $23.0B year-over-year—a $12.3B cash burn in 2025. That acceleration signals capex or shareholder returns ramping precisely as tariff protection collapses. Equipment, tubulars, and offshore fabrication costs just reset upward. Chevron reported Q3 2025 diluted EPS of $5.27 and liabilities of $130.9B as of 2025-09 . The company's recent insider activity shows executives systematically selling—Booth Thomas Ryder (Chief Technology & Engineering Officer) sold 10,600 shares on 2026-02-12 and another 1,122 shares on 2026-02-13 —a pattern consistent with executives hedging against near-term margin compression they see coming. Why the Tariff Reversal Hits Energy Harder Than Retail Most commentary frames the Supreme Court ruling as a win for retailers (TJX, HD, WMT). It is. But energy is the inverse: upstream capex cycles depend on *predictable* input costs. Tariff protection gave operators 12+ months to lock in contracts at elevated capex budgets. Now: - Offshore platform steel: Re-tariffed equipment costs squeeze project IRRs; majors may delay FID (final investment decisions) on marginal projects. - Refining margin compression: Crude price stability masks downstream input cost inflation. Refined product margins tighten in H1 2026 earnings. - Supply chain re-hedging: Energy operators must absorb tariff uncertainty in revised capex guidance, raising WACC assumptions. XOM's Cash Burn + Tariff Shock = Earnings Guidance Risk ExxonMobil will guide to lower 2026 upstream capex in Q1 earnings (late April), citing tariff uncertainty and project IRR re-evaluation. The company burned $12.3B in cash in 2025 while maintaining shareholder distributions; that runway compresses if tariff costs spike $2-4B annually on major projects like Guyana ramp-up. Insiders at both XOM and CVX have been passive sellers (not aggressive buyers), a neutral-to-slightly-bearish micro-signal suggesting management has already priced near-term margin pressure into their exit decisions. Why This Matters for Energy Thesis The tariff reversal rewrites the geopolitical risk narrative I've been tracking: 1. Tariff protection was a supply-side tailwind for capex discipline; its removal destabilizes project economics. 2. **Energy's margin story was *half-priced* in tariff stability; now margin forecasts must reset lower. 3. Defense, by contrast, has *structural

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