SLB on Friday reported a drop in first-quarter profit as disruptions stemming from the conflict involving Iran dampened demand for its oilfield services in a key producing region. Shares slipped around 3% in premarket trading.
Company leadership attributed the weak start to the year to broad disturbances across the Middle East. "It was a challenging start to the year as widespread disruptions in the Middle East impacted our business," the CEO said, adding that "The impact was most pronounced in Well Construction and Reservoir Performance."
Financially, SLB said revenue from the Middle East and Asia decreased 10% to $2.69 billion for the quarter, while consolidated revenue totaled $8.72 billion. The Middle East remains the company’s largest market, representing about 34% of its annual revenue in 2025.
The company disclosed that it had demobilized operations in a few countries after customers moved to safeguard personnel and facilities. Those precautionary measures, according to SLB, curtailed field activity in affected areas.
Regional attacks on energy infrastructure and Iran’s effective closure of the Strait of Hormuz pushed oil prices higher. However, SLB said that the price rise did not translate into increased demand for its services or those of its peers. Instead, oil producers adopted a more cautious posture and did not accelerate drilling programs, limiting near-term service activity.
On profitability, net income attributable to the company was $752 million, or 50 cents per share, for the three months ended March 31. That compares with $797 million, or 58 cents per share, in the same quarter a year earlier.
Analysis - From a sector perspective, the decline highlights how geopolitical disruptions can reduce service activity even when commodity prices are rising. The dynamics in the Middle East had an outsized effect given the region’s share of SLB’s revenue. Operational pullbacks and customer-driven demobilizations directly affect service utilization and revenue recognition in affected geographies.
Market reaction was immediate but measured, with the stock trading lower in premarket hours as investors digested the combination of revenue pressure in a key region and a modest year-over-year profit decline.