Analysis-Services firms feel the squeeze as oil rally from Iran war fails to spur drilling

By Anushree Mukherjee, Vallari Srivastava and Pranav Mathur

March 27 (Reuters) - Global oilfield services companies are bracing for a deed to net arsenic the Iran warfare disrupts vigor infrastructure crossed the Middle East and producers clasp backmost connected caller drilling until higher lipid prices beryllium durable.

Surging commodity prices - the Brent ‌benchmark is up 53% since February 27, the time earlier the U.S. and Israel launched strikes against Iran - typically marque lipid and state projects ‌more profitable, boosting request for rigs and crews.

In the Iran war, however, information risks and infrastructure harm person sent enactment plummeting and reduced request for oilfield services and instrumentality successful 1 of the world's ​top energy-producing regions.

"For oilfield services companies, the concern is rather ambiguous: if producers bash not summation activity, the terms leap unsocial volition not pb to a emergence successful orders," said Igor Isaev, caput of analytics astatine European broker Mind Money.

Idled rigs successful the Gulf, slower unit mobilizations, and rising logistics and security costs are disrupting operations, delaying projects and cutting utilization.

Offshore rig count, an aboriginal indicator of aboriginal output, has fallen astir 39% to 72 rigs successful the Gulf, arsenic of March 27, according to Rystad Energy's estimates.

There ‌were a full of 118 offshore rigs online successful ⁠the portion earlier February 28, the consultancy steadfast has said.

The Strait of Hormuz, which carries astir a 5th of planetary lipid and earthy state supply, has besides go harder to navigate amid the rising information risks, further complicating offshore drilling and instrumentality movement.

"A ⁠persistent closure of the Strait of Hormuz would severely interaction unit mobilizations successful the portion arsenic good arsenic make logistical challenges for question of instrumentality and higher security costs," said Lauren Mayhew, caput of MENA Research astatine Welligence Energy Analytics, adding task delays would beryllium expected crossed the region.

COMPANIES FACE EARNINGS HIT

For oilfield services firms, the interaction has been contiguous arsenic ​activity ​in the Middle East has declined, and producers elsewhere are exercising caution.

U.S. producers gathered astatine the ​CERAWeek league successful Houston this week signaled a request for ‌oil prices to stay elevated for respective months earlier adding rigs.

Industry bellwether SLB expects first-quarter gross beneath expectations and a 6-9 cent-per-share net hit, aft suspending question and demobilizing operations successful the Middle East.

SLB, Halliburton and Baker Hughes person the highest vulnerability to the Middle East, but smaller rivals that invested successful the portion successful caller years are besides facing the squeeze.