Oil prices won’t return to pre-war levels soon? They said something almost no Americans

Recently, the world's two largest oilfield service companies said something that almost no American wants to hear.

SLB last Friday and Halliburton earlier this week stated that they expect crude oil prices to remain high for a longer period. This will immediately impact a range of petroleum-derived products and other industries, but the most closely watched is undoubtedly gasoline.

U.S. President Donald Trump once remarked that Americans should expect gasoline prices to remain high "for a while." After the US went to war with Iran, the average US gasoline price quickly broke through $4 per gallon, and this price is unlikely to retreat as quickly as consumers or the Trump administration would hope.

The global energy market is undergoing one of its worst scenarios—a partial closure of the Strait of Hormuz. In peacetime, about one fifth of the world’s crude oil and refined oil products are transported through this strait. Attacks on pipelines and other energy infrastructure have also severely impacted the crude oil market.

With a market capitalization of $82 billion and operations in over 100 countries, the American giant SLB stated that it expects "post-conflict liquid commodity prices to remain above pre-conflict levels." The company said this reflects short-term supply disruptions resulting from damaged infrastructure, production interruptions, and other impacts, as well as a geopolitical risk premium.

SLB noted that many countries may respond by prioritizing supply diversification, investing in exploration and domestic resource development, and replenishing strategic reserves once the conflict has subsided.

Halliburton CEO Jeff Miller, in a call with analysts after the $33 billion company reported earnings on Tuesday, expressed a similar viewpoint.

Miller stated, “I think the situation in the Middle East will have a significant and lasting impact on the global energy industry.” He said that energy security “is no longer just a talking point,” and that the company expects to see “increased investment in localized oil and gas development, as well as an urgent push for diversification of oil and gas sources in countries lacking their own resources.”

Miller said that restoring oil and gas production and inventory “will not be a quick or simple process.” He stated, “Big picture, this means the global oil and gas fundamentals are much tighter than they were 60 days ago.”

SLB also indicated it expects short-cycle project investment to increase in North America and Latin America, while long-cycle development will also rise, especially in deepwater offshore markets.

The company added: “Unless prolonged conflict causes economic slowdown and demand destruction, these supply-side responses will reinforce our confidence in a broad upstream market recovery in 2027 and 2028.”

Halliburton’s Miller essentially expressed the same view, emphasizing that upstream investment and oilfield services are facing a “more constructive environment.” He said Halliburton “will thrive in this market.”

Since the beginning of this year, shares of both companies have risen more than 40%, compared to a roughly 4% gain in the S&P 500. Last week, Halliburton rose nearly 7%, and SLB rose nearly 5%.