WTI holds above $80 as 20% of global oil shipments are cut. Drillers like Nabors see upgrades. A truce reopening the Strait of Hormuz could reverse gains.
Oil prices jumped on June 10 after President Trump told reporters he intended to strike Iran again, following recent assaults in the Middle East. The resulting blockage of the Strait of Hormuz has cut roughly 20% of global petroleum shipments, creating a supply imbalance that analysts project will last into 2027.
That imbalance is a tailwind for oil and gas drilling stocks. Rig demand rises when operators need to tap harder-to-reach reserves. Shell CEO Wael Sawan told the Wall Street Journal CEO Summit that "all the easy oil and gas has been found." Future supply will require higher prices to justify complex developments, he said.
Nabors Industries offers a clear example. On May 7, Barclays analyst Eddie Kim raised the stock to Equal Weight from Underweight, lifting his price target to $99 from $65. RBC Capital's Keith Mackey followed with a $120 target after Nabors reported Q1 revenue of $784 million and a narrower-than-expected loss of $1.54 per share, beating the $2.44 consensus by roughly 37%. The company's EBITDA held up during the Middle East disruption, and free cash flow improved.
Other names in the drilling group – Noble Corp, Helmerich & Payne, Transocean, Seadrill, Sable Offshore, and Patterson-UTI – also stand to benefit from sustained tight supply. Market expectations of a potential truce, however, cap the upside. Prices trended lower through the week as hopes for a deal grew. If the Strait reopens, oil could drop, reducing the urgency for new rig contracts.
Shell, the oil major behind Sawan's remarks, carries an Alpha Score of 43 out of 100 (Mixed) on AlphaScala, reflecting the uncertainty around where crude settles when the blockage ends. For pure‑play drillers, the next catalyst is the Trump administration's Iran policy and any signs of diplomatic progress. A deal that reopens the strait would dismantle the supply thesis; continued strikes keep the supply premium intact.
The drilling thesis gains support from sustained dayrate increases and new contract announcements. Weekly inventory draws that show the supply deficit deepening would confirm the story. A ceasefire announcement or a WTI drop below $75, where some deepwater projects become uneconomic, would weaken it. The 10‑day moving average of crude and headlines from Muscat or Geneva regarding talks are the key inputs for position sizing.
Shares of Nabors closed at $87 on Friday, about 13% below the RBC target, implying upside if the supply imbalance holds.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.