US Oil & Gas Equipment and Services: Which Stocks Can Work Through the Volatility? 2q Preview

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US Oil & Gas Equipment and Services: Which Stocks Can Work Through the Volatility? 2q Preview

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14 Jul 2026 05:00:00 ET │ 28 pages

US Oil & Gas Equipment and Services

Which Stocks Can Work Through the Volatility? 2q Preview

CITI'S TAKE

Scott Gruber AC

OFS stocks are being pulled by the on/off nature of the Iranian conflict. With +1-212-816-8919

disparate end market pathways post-conflict (see below), it's proving scott.gruber@citi.com

difficult for investors to re-engage given the uncertainty, even after the

recent pull-back. However, we see opportunities and seek to identify Johan Monge

investment narratives with the best risk/return skew. Within large caps, we +1-212-816-2803

believe HAL presents best risk/reward given share gains abroad (~60% johan.monge@citi.com

exposed), upside to U.S. frac pricing and optionality when the Middle East

returns to growth. In our view, SEI offers the best long-term BTM narrative

(contract expansion should continue), but a data center contract for a

smaller-cap provider could be more impactful (we lean toward PUMP).

NE/SDRL should benefit from deepwater rig rates trending higher and no

Middle East operational risk. WTTR has several larger water projects

becoming operational this year and thus CF improvement lies ahead that's

non-crude price dependent despite its U.S. exposure.

End Market Outlook — We see disparate end market pathways from here which can

best be summarized as: Middle East – activity/cost headwinds until conflict ends but

upside post in almost any crude price scenario; Offshore & Other Onshore Markets –

upside under moderate to elevated crude prices; U.S. Onshore – the swing market,

upside under elevated crude prices.

Identifying Positive Risk Skew — With the GTLS overhang better digested,