Insight
Middle East Conflict: what it means for Oilfield Services
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
The conflict has created a paradox for the sector. Surging oil prices historically drive increased activity and improved margins for Oilfield Services (OFS) providers. However, in the near-term at least, operators have limited flexibility to ramp up and lower activity in the Middle East more than offsets margin gains in categories such as interventions. In the Arabian/Persian Gulf region, costs to OFS have risen across equipment, services, shipping, insurance and risk premiums. Contractors are revising project bids and ongoing activity is impacted by war price premiums. These costs are filtering through to higher operator prices. In the rest of the world, reduced trade flows and infrastructure damage have raised OFS costs, particularly for commodities linked to refined products. These costs affect mostly operating expenses incurred by operators, but we also expect capital expenses to become incrementally impacted if the conflict continues.
Table of contents
- Executive Summary
- Near-term impacts in the Persian Gulf
- OFS supply chain impacts
-
OFS financial impacts
- Well services
- Offshore drillers
- Others
- Longer-term OFS disruption
- New project impact
- Capital allocation unlikely to shift meaningfully
- No strategic shift away from the Middle East
- Could we see a global supply response and what would it require from OFS?
- Impact of the conflict on OFS costs outside of the Persian Gulf
Tables and charts
This report includes the following images and tables:
-
Production cuts for Gulf producers as of 27 April (exc. Iran)Exports from Gulf countries as of 30 AprilWar costs impacts on upstream categories Jan'26 to Apr'26*
What's included
This report contains:
Other reports you may be interested in
Insight
The Middle East conflict: why carbon markets are not yet disrupted
This insight covers impact of the conflict in four key areas – carbon policies, compliance prices, carbon offset markets and CCUS.
$1,250
Insight
Middle East conflict: implications for the region’s oil-producing NOCs (Part 1)
The conflict is exposing sharp differences in export flexibility, spare capacity and financial resilience across the region’s NOCs
$1,350
Insight
Russia/Ukraine crisis: Recession risk and what it means for oil demand
Our short-term demand scenario incorporating downside risk from the Russia/Ukraine crisis
$1,350
