Investors will get their clearest view yet of how the Iran war has affected the world's largest oilfield service companies as Halliburton NYSE:HAL, a U.S. oilfield services provider, begins the sector's earnings season on Tuesday. Analysts expect Halliburton's earnings per share to decline 2%, while SLB NYSE:SLB, a global oilfield services company with significant Middle Eastern exposure, is projected to report a 31% drop later in the week. This would represent SLB's largest profit decline since the final quarter of 2020. Baker Hughes NASDAQ:BKR, an energy technology and oilfield services company with substantial exposure to the Middle East, is expected to follow on Sunday with a 21% decline in per-share profit.
The April-to-June period marked the first full quarter since the U.S.-Israeli war with Iran intensified, forcing oil production to be reduced or suspended in countries including Iraq, Qatar and Kuwait. Weatherford International NASDAQ:WFRD, an oilfield services company, and Halliburton had already indicated that the second-quarter impact could be greater as operations were halted and the timing of any recovery remained uncertain. Scott Gruber, an analyst at Citigroup Global Markets, said investors will be looking for guidance on the Middle East outlook, the pace of a possible global oilfield activity recovery in 2027 and the regions that could support future growth. Gruber noted that activity has been increasing among private operators in North America and across Latin America, Europe and Africa, suggesting that oilfield service conditions outside the Middle East are generally improving.
A rebound in U.S. drilling has helped offset part of the Middle Eastern weakness, with producers adding approximately 46 oil rigs from December's lows as stronger oil prices encouraged additional activity and oilfield wages reached record levels. James West, an energy analyst at Melius Research, said investors will want to understand how operating conditions have changed after some Middle Eastern production returned sooner than expected, including the state of reservoirs and how quickly output could be restored. Shale producers are expected to remain cautious with spending, although higher oil prices could push budgets toward the upper end of existing guidance and create stronger demand for oilfield services. Investors may also focus on whether management teams can provide confidence in a multiyear growth trend beyond 2026, including potential expansion into infrastructure and power solutions for data centers that could rely on natural gas for behind-the-meter electricity.