What Happened?
A number of stocks fell in the morning session after WTI crude oil plunged on Iran-US peace deal progress and renewed hopes for reopening the Strait of Hormuz.
Oilfield services companies (Schlumberger (SLB), Halliburton (HAL), Baker Hughes (BKR), TechnipFMC, and the offshore drillers) get paid only when oil producers spend money drilling new wells.
When oil prices drop sharply, producers slash their capex budgets within weeks, which directly cuts the revenue these service companies see in the next two to three quarters. Imagine a Permian shale producer that built its 2026 drilling budget assuming $100 oil. When oil drops to $93 in a single session, the math on the next 50 wells suddenly looks much thinner: fewer barrels make economic sense to extract. Producers respond by deferring or cancelling rig contracts, sand orders, hydraulic fracturing services, and completion equipment. That's exactly what oilfield services sell.
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 ProFrac (NASDAQ: ACDC) fell 4.5%. Is now the time to buy ProFrac? Access our full analysis report here, it’s free.
- Oilfield Services company NOV (NYSE: NOV) fell 4.7%. Is now the time to buy NOV? Access our full analysis report here, it’s free.
- Oilfield Services company Borr Drilling (NYSE: BORR) fell 4.4%. Is now the time to buy Borr Drilling? Access our full analysis report here, it’s free.
Zooming In On NOV (NOV)
NOV’s shares are somewhat volatile and have had 13 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 9 days ago when the stock gained 3.1% after crude oil pushed back above $100 a barrel, with Brent near $111 and WTI close to $108.
The move followed fresh comments from President Trump that "the Clock is Ticking" for Iran, a drone attack on the UAE's Barakah nuclear plant over the weekend, and the continued closure of the Strait of Hormuz, a chokepoint that normally carries about 20% of the world's oil. The Energy Select Sector SPDR Fund (XLE) gained roughly 2.4%, with Exxon, Chevron and ConocoPhillips leading. Supply data added to the squeeze: U.S. crude inventories fell 4.3 million barrels in early May, dropping below the five-year average, while natural gas futures jumped. The risk for investors remained symmetrical as any de-escalation could reverse the move just as quickly.
NOV is up 23.1% since the beginning of the year, and at $20.20 per share, it is trading close to its 52-week high of $21.17 from May 2026. Investors who bought $1,000 worth of NOV’s shares 5 years ago would now be looking at an investment worth $1,244.
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