U.S. oilfield service firms are facing significant challenges following President Donald Trump’s recent tariff announcement, which is disrupting supply chains and contributing to a decline in oil prices.
Analysts predict that the combined effects of the tariffs and lower oil prices could lead to a drop in drilling activity, placing additional pressure on major oil services companies.
Financial services firm Morningstar downgraded its fair value estimates for the three largest oilfield service firms—SLB, Halliburton, and Baker Hughes—by 3-6% following the announcement of the tariffs. The firm warned that these companies could see a 2-3% decline in oilfield revenue in 2025. For each dollar lost in revenue, Morningstar estimates these companies could lose between $1.25 and $1.35 in operating profit.
The tariffs, which are expected to impact crucial components such as pipes, valve fittings, and sucker rods, are particularly concerning for these firms, which rely on multinational sourcing strategies, according to Rystad Energy's Ryan Hassler.
Shares of the major oilfield service firms took a hit on Friday. SLB, the world’s largest oil services company, saw its stock drop by 12%, reaching its lowest point since September 2022. Halliburton’s stock fell by 10%, while Baker Hughes’ shares tumbled by 11%.
In addition to the tariff challenges, oil prices also took a sharp dive after China— the world’s largest crude oil importer—escalated tariffs on U.S. goods. This move sparked concerns about a global recession and a subsequent dip in oil demand. Crude oil futures were down more than 8% in afternoon trading, with global benchmark Brent crude falling to $64.03 per barrel and U.S. West Texas Intermediate crude (WTI) hitting $66.90.
If WTI remains in the $60 per barrel range for an extended period, it could lead to reduced activity in the U.S. shale sector by the second half of the year, Rystad’s Hassler warned. Investment bank JP Morgan has raised the probability of a global recession by the end of the year to 60%, up from 40% previously.
"The curtain appears to be falling on global trade as we knew it," said Tamas Varga, an analyst at PVM Oil Associates. "The threat of recession is front of mind, and investors are retreating from risk assets such as oil and equities."
Ukrainian President Volodymyr Zelenskyy said on Friday that allied supplies of air defence systems and missiles were insufficient as Russia prepares n...
Mongolia has introduced a new decree to strengthen traditional Mongolian medicine and expand its international profile....
Poland plans to expand its armed forces to 500,000 by 2039, including 300,000 active-duty troops and 200,000 reservists, officials said Friday. The en...
Kyiv is facing its most severe wartime energy crisis, with the capital receiving only about half the electricity it needs, Mayor Vitali Klitschko told...
White House announced on Friday the formation of a technocratic committee to oversee the transition of power in the Gaza Strip as part of President Do...
President Donald Trump said the U.S. is ready to restart mediation between Egypt and Ethiopia to help resolve their long-running dispute over Nile River water sharing.
President Donald Trump posted on Truth Social on Thursday that Iran had cancelled more than 800 executions that were scheduled to take place.
President Donald Trump on Friday said he is considering using tariffs to pressure countries that oppose U.S. plans related to Greenland, arguing the Arctic island is vital for national security.
President Donald Trump announced Thursday evening that the long-awaited “Board of Peace” to oversee Gaza’s reconstruction has officially been formed.
At least four people were injured after a large fire and explosions hit a residential building in the Dutch city of Utrecht, authorities said.
A railway power outage in Tokyo disrupted the morning commute for roughly 673,000 passengers on Friday (16 January) as two main lines with some of the world's busiest stations were halted after reports of a fire.
Iran reopened its airspace late on Wednesday after a near five-hour closure that disrupted airline traffic, amid heightened concerns over possible military escalation involving the United States.
Russian President Vladimir Putin has warned that the international situation is worsening and that the world is becoming more dangerous, while avoiding public comment on events in Venezuela and Iran.
A SpaceX capsule carrying a four-member crew home from orbit in an emergency return to earth necessitated by an undisclosed serious medical condition afflicting one of the astronauts splashed down safely early on Thursday (15 January) in the Pacific Ocean off California.
Ukrainian President Volodymyr Zelenskyy said on Friday that allied supplies of air defence systems and missiles were insufficient as Russia prepares new large-scale attacks.
Poland plans to expand its armed forces to 500,000 by 2039, including 300,000 active-duty troops and 200,000 reservists, officials said Friday. The enlarged force would feature a new high-readiness reserve unit.
Kyiv is facing its most severe wartime energy crisis, with the capital receiving only about half the electricity it needs, Mayor Vitali Klitschko told Reuters on Friday.
White House announced on Friday the formation of a technocratic committee to oversee the transition of power in the Gaza Strip as part of President Donald Trump's 20-point plan to end the conflict in the territory.
Venezuela confirmed that 47 soldiers died during a U.S. military operation earlier this month that captured President Nicolás Maduro.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment