July 24 (Reuters) – SLB topped Wall Street expectations for second-quarter profit and forecast sequential revenue growth, as strength outside the Middle East offset disruptions from the Iran war, sending its shares up more than 10%.
The world’s largest oilfield services provider expects global third-quarter revenue to grow 3% to 4% sequentially under its base-case scenario, with a gradual recovery in the Middle East.
In the event of a significant escalation that disrupts ongoing re-mobilization efforts, Middle East revenue would be flat, CEO Olivier Le Peuch said, with current-quarter revenue coming in $150 million lower than the base case.
The Middle East is SLB’s biggest market, accounting for 34% of its 2025 revenue.
Frequent flare-ups in the war, now in its fifth month, have kept a crucial oil-producing region on edge, with Iran now seeking to shut the Bab el-Mandeb gateway to the Red Sea after choking off shipping through the Strait of Hormuz.
SLB also projected materially higher free cash flow in the second half of 2026 and said it expects more contract awards in the coming weeks and months that would strengthen its market position in the Middle East.
Revenue from the Middle East and Asia fell 14% to $2.57 billion in the second quarter, hit by lower activity and operational disruptions associated with the conflict, including constraints in Iraq.
But Le Peuch noted activity is picking up pace in the UAE, Qatar and to some extent in Saudi Arabia. Still, “The timing of a full recovery remains uncertain and will depend on a durable resolution of the conflict,” he said.
The impact of the Iran war was at the lower end of its guidance of 6 cents to 8 cents per share, helped by temporary cost actions.
Range-bound commodity prices are expected to support upstream investment, the company said.
“Customers are eager to restore production,” Le Peuch said, and if the conflict does not escalate further, he expects a “gradual recovery unfolding in the third quarter.”
SLB expects revenue to surpass $10 billion in the fourth quarter, representing a 5% year-over-year growth.
Second-quarter revenue rose to $8.97 billion, powered by a 36% jump in North America and a 15% increase in Latin America.
The company posted adjusted earnings of 55 cents per share, beating estimates of 51 cents, according to data compiled by LSEG.
VENEZUELA TO SUPPORT GROWTH IN 2027
In Venezuela, SLB said it has been preparing for an expected recovery in oil production and to “walk side-by-side” with companies that plan to re-enter.
The company is working with international oil companies in the planning and mobilization of resources and expects to enter 2027 with multiple contracts and customers.
As oil majors like Chevron advance plans to ramp up production in the South American country, oilfield contractors such as SLB are expected to benefit.
Brazil Energy Insight 
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