The oil-field service industry is about to show just how much the US-Israeli conflict with Iran has cost it.
Three big players - Halliburton, SLB, and Baker Hughes - are set to report quarterly earnings in the coming days. The numbers do not look pretty.
Halliburton and Weatherford International have already warned that the second quarter will take a bigger hit. The war forced companies to shut down or slow production in several Middle Eastern countries, including Iraq, Qatar, and Kuwait. Work stopped, and recovery timing is uncertain.
Crude oil is trading at $82.98 a barrel.
The conflict, which intensified in early 2026, has disrupted oil production across the Middle East, a region that accounts for nearly a third of global crude output. The shutdowns in Iraq, Qatar, and Kuwait alone represent a significant portion of the oilfield service market. Analysts are monitoring how quickly these operations can resume, as any prolonged halt could affect global supply chains and energy prices.
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The root cause is straightforward: the US-Israeli war on Iran escalated, which caused output to be reduced or shut down across multiple nations. Companies halted operations and face uncertain recovery timing.
Melius Research energy analyst James West stated the situation clearly. "We'll want to understand what is the situation on the ground in the Middle East as we're getting back to work," he said. "What the reservoirs look like, what the production looks like, how quickly can we bring that production back online?"
That uncertainty matters for investors because oil-service companies make money by keeping rigs running. Since December, the U.S. has seen an addition of 46 oil rigs, with 7 of those in the latest week, indicating a pickup in domestic activity. But the Middle East remains an open question.
The earnings calls will not just be about the past quarter. Everyone wants to know what happens next.
Citigroup analyst Scott Gruber said investors want details on what lies ahead in the Middle East and indications about the pace of a worldwide oil-field recovery in 2027, along with potential growth areas. "People would like to see a multiyear growth trend emerge," Gruber said.
The first full quarter since the conflict escalated runs from April through June 2026. That is when the numbers will really show the war's effect. But beyond that, there is a longer-term opportunity taking shape.
Analysts will scrutinize second-quarter guidance for indications of whether operations can resume later this year.
James West pointed out that oil-service companies are a natural fit to power data centers. "It makes sense if natural gas is going to be our power source for a lot of these data centers behind the meter, then the oil-service company, that's their bread and butter," he said. Companies in this sector are already expanding into offering hardware and energy systems for data centers, an expanding field.
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