Barclays says it’s the best time to buy oil services stocks in two decades, even as the Iran war shows signs of coming to an end. The bank upgraded the U.S. energy services and technology sectors to “Positive” from “Neutral” and raised oil services companies such as Halliburton and others to “Overweight” from equal weight. “As global markets withstand an unprecedented global supply shock, we believe the impact on oil markets will be felt for many years to come,” analyst J. David Anderson wrote in a note to clients on Thursday. “While the next few months will be highly volatile, events in the Middle East will ultimately lead to structurally higher oil prices and a resulting multi-year upstream spending cycle that will drive outperformance of the energy services sector.” Oil prices fell below $100 a barrel this week after reports that the United States and Iran could be close to an agreement to end their two-month war. President Trump has expressed some doubts about the likelihood of an agreement. U.S. West Texas Intermediate futures fell 5% to about $90.51 on Thursday. That’s almost 20% less than the high of just over $112 reached at the beginning of April. Futures are still up about 58% over the past 12 months. According to Barclays, the main beneficiary, Halliburton, will benefit in the long term from higher oil prices. The bank raised its 12-month price target on the stock to $55 from $37, a 36% increase from Wednesday’s close. “We see HAL as the name in our coverage that has the cyclical bottom priced into its core business while the energy option becomes more tangible but still under-monetized in the multiple,” Anderson wrote. “Preparations for 2H26 are more constructive than consensus assumes.” Barclays’ call is in line with the consensus on the Street, where 21 of 29 analysts covering Halliburton rate the company a “buy” or “strong buy.” Shares are up 38% in 2026. Oil service improves Barclays also upgraded Patterson-UTI Energy and ProPetro Holding to overweight from equal weight, saying: “The greatest earnings pressure on higher oil prices is among those with the most leverage in North America.” Offshore oil services companies such as Transocean and drillers Noble Corporation and Seadrill were also upgraded to overweight from equal weight. “We believe offshore could be the biggest winner in this new environment.” [final investment decisions] “Development is increasing and activity is increasing,” Anderson wrote. Barclays forecasts there will be 131 active deepwater drilling rigs in operation by the end of 2027, up from 122 today, providing a tailwind for offshore stocks.
