What Happened?
A number of stocks fell in the morning session after the price of oil fell sharply as the U.S. and Iran announced a peace deal to end their conflict.
The mechanism works through a tight chain of dependency. SLB, Halliburton, and Baker Hughes do not produce oil, they get paid only when producers drill wells. A Permian shale operator that set its 2026 drilling budget assuming $100 oil now reassesses each planned well against $80 WTI. At lower prices, fewer wells clear the economic hurdle, and producers respond by deferring rig contracts, cutting hydraulic fracturing schedules, and cancelling completion equipment orders.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Oilfield Services company Nabors Industries (NYSE: NBR) fell 4%. Is now the time to buy Nabors Industries? Access our full analysis report here, it’s free.
- Oilfield Services company RPC (NYSE: RES) fell 2.8%. Is now the time to buy RPC? Access our full analysis report here, it’s free.
Zooming In On Nabors Industries (NBR)
Nabors Industries’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 6.6% on the news that the U.S. launched "self-defense strikes" on Iran as Trump warned the country "will have to pay the price" for stalling negotiations.
$90+ oil and a seventh consecutive inventory draw make sustained upstream spending the only logical decision for U.S. producers.
The EIA reported that crude inventories fell 7.2 million barrels the previous week, the seventh straight draw, nearly double the 4 million barrel consensus, while Cushing hub stocks fell to around 22 million barrels, a level describes as "multi-decade lows" for total U.S. petroleum stocks. Oilfield services companies (SLB, Halliburton, Baker Hughes) are paid when E&P operators drill.
When inventory is critically tight and oil is at $90+, producers expand rig counts and completion programs, not defer them. Iran's disruption of more than 11 million barrels per day of Middle East production placed U.S. upstream activity at the centre of global supply response, making sustained domestic drilling not just profitable but necessary.
Nabors Industries is up 75.6% since the beginning of the year, but at $97.30 per share, it is still trading 12% below its 52-week high of $110.63 from May 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Nabors Industries’s shares 5 years ago would now be looking at only $770.09.
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