The world’s largest oilfield-service providers are looking to production increases in the Middle East to help offset a slowdown in US shale.
That’s one of the big takeaways from comments this week made by executives at Helmerich & Payne Inc. and Patterson-UTI Energy Inc., who pointed to opportunities in countries such as Saudi Arabia to help drive growth. The comments echoed outlooks from some of the biggest names in the industry, including SLB and Weatherford International Plc, who expect the Middle East to lead a rebound in activity for the end of 2026 through 2027.
Operators in the US shale patch, once the world’s leader in oil production growth, are now closely watching commodity markets as they hover near the level that makes drilling profitable for producers. If crude prices drop into the low $50-per-barrel range for several months, companies are expected to make more drastic cuts to drilling and fracking in the US.
Global oil prices have steadily declined in the past several months on expectations of a glut. West Texas Intermediate, the US benchmark, has fallen more than 10% over the past year, trading around $63 a barrel on Thursday.
But some producers in the Middle East can better sustain the lower crude prices, which underscores why the oilfield-services companies are looking there for growth. Projects to frack for natural gas have also emerged in the region, as governments face rising electricity demand, industrial expansion and petrochemical build-outs.