Oil Servicers Look to Middle East for Growth on Shale Slowdown

Middle East trade is growing at a faster rate than global averages, with a projected 15% increase from 2021 to 2024. This growth is driven by shifting supply chains and rerouting through the region. Asia remains the dominant trade corridor and is expected to expand from $0.9 trillion in 2024 to $1.5 trillion by 2030. Meanwhile, GCC-Africa trade is set to double to $260 billion by 2030, highlighting the region's expanding economic influence.

GCC countries are the main drivers of Middle East trade, with the UAE acting as a regional hub and Saudi Arabia anchoring demand and industrial exports. Non-oil imports are outpacing exports across key partners, indicating a shift in trade dynamics. As global energy markets adjust to a more diverse supply base, oil servicers are increasingly looking to the Middle East for growth.

Why Did Oil Servicers Shift to the Middle East?

U.S. shale activity has slowed, prompting oil servicers to explore alternative markets. Patterson-UTI Energy, for example, noted stable activity in the first quarter of 2026, but acknowledged challenges from commodity uncertainty. Oil prices remain near $60 per barrel, which supports stable production in oil basins.

The Middle East, with its growing infrastructure and industrial demand, provides an attractive alternative for drilling and completion services. Patterson-UTI has seen strong returns from new technology investments, including automation and advanced rig structures, making them competitive in international markets.

How Are Market Dynamics Shaping the 2026 Outlook?

Recent geopolitical tensions in the Persian Gulf have influenced oil prices. WTI crude futures for March delivery rose by 1.7% on Feb. 3 after the U.S. military shot down an Iranian drone in the Arabian Sea. Although tensions eased slightly, the region remains a key driver of oil market volatility.

OPEC+ has maintained its output freeze for March, while member countries like Iraq, Kazakhstan, Oman, and the UAE are working to compensate for overproduction. This decision reflects a cautious approach to seasonal demand fluctuations and global economic uncertainties.

What Are the Implications for Oil Servicers in 2026?

Infrastructure projects are a major focus for companies in the energy sector. MDU Resources has initiated 2026 guidance, with a projected earnings per share range of $0.93 to $1.00. The company is investing $560 million in capital projects, including the Minot Expansion and the Bakken East pipeline.

Technology investments are also central to the industry's future. Patterson-UTI is expanding its use of natural gas fuel and automated drilling systems, which are expected to enhance efficiency and reduce capital expenditures. Saudi Arabia's new drill bit manufacturing facility is another example of regional industrial growth that supports oil servicers.

What Role Does the Middle East Play in Global Trade?

The Middle East's growing trade corridors are reshaping global economic patterns. The UAE and Saudi Arabia are leading the region's expansion, with non-oil imports expected to drive much of the growth. Asia and Africa are key trading partners, with the GCC-Africa trade projected to double to $260 billion by 2030.

Trade dynamics are also influenced by shifts in supply chain strategies. As companies seek to diversify their sourcing, the Middle East's strategic location and growing industrial capacity make it an attractive destination for investment.

What Events and Trends Are On the Radar for 2026?

Major industry events and infrastructure developments are set to take center stage. A subsidiary of Ambitions Enterprise Management Co. L.L.C will coordinate the 2026 Middle East Consumer Electronics Show in Dubai. This event highlights the region's growing role as a hub for international trade and technology.

The U.S. and Iran have also been in discussions about a potential trade deal, which could impact oil supply and demand. A U.S. trade agreement with India, including the removal of tariffs on Indian oil imports, is another factor that could influence global oil markets.

Investors are closely monitoring these developments as they could have significant implications for oil servicers and related industries. The combination of geopolitical dynamics, infrastructure investment, and technological innovation is shaping a complex but promising outlook for the sector.