It’s the best time in two decades to buy oil service stocks, even as the Iran war is showing signs of coming to an end, according to Barclays. The bank upgraded the U.S. energy service and technology sector to positive from neutral, and raised oil service providers such as Halliburton and others to overweight from equal weight. “As global markets withstand an unprecedented global supply shock, we believe the effects on the oil markets will reverberate for many years,” analystJ. David Anderson wrote Thursday in a note to clients. “While the next several months will be highly volatile, ultimately, the events in the Middle East will result in structurally higher oil prices and an ensuing multi-year upstream spending cycle to drive outperformance of the Energy Services sector.” Oil prices fell below $100 a barrel this week on reports that the U.S. and Iran could be close to a deal to end their two-month war. President Trump has expressed some doubts about the likelihood of reaching a deal. U.S. West Texas Intermediate futures are down 5% Thursday, at about $90.51. That’s almost 20% off their high just above $112 reached in early April.Futures are still up about 58% over the past 12 months. Major beneficiary Halliburton is poised to benefit from higher oil prices over the long term, according to Barclays.The bank raised its 12-month price target on the stock to $55 from $37, implying 36% upside from Wednesday’s close. “We see HAL as the name in our coverage where the cyclical trough is being priced in on the core business while the power optionality is increasingly tangible but still under monetized in the multiple,” Anderson wrote. “The setup into 2H26 is more constructive than consensus is giving credit for.” Barclays call matches the consensus on the Street, where 21 of 29 analysts covering Halliburton give it a buy or strong buy. Shares are up 38% in 2026. Oil service upgrades Barclays also upgraded Patterson-UTI Energy and ProPetro Holding to overweight from equal weight, saying “the most earnings torque to higher oil prices are those with the most leverage to North America.” Offshore oil-focused services companies such as Transocean and drilling contractors Noble Corporation and Seadrill were also raised to overweight from equal weight. “We believe the Offshore could be the biggest winner in this new environment with [final investment decisions] accelerating and activity inflecting,” Anderson wrote. Barclays forecasts 131 active deepwater rigs will be up and running by the end of 2027, up from 122 today, which will serve as a tailwind for offshore stocks.
