Quarterly Summary
In 2025, oil prices averaged US$69, down 14.8% from US$81 in 2024. The downturn was reflected in land‑rig contractors’ financials, with public contractors reporting US$14 billion in revenues, a 3% YoY decline. This is the first annual drop in total revenues since 2020, driven by softer North American activity and limited international gains. Fortunes in international drilling markets were mixed, with US Lower-48 revenues maintaining a strong oil price link, albeit with a six-month lag. As a result, the downturn in oil prices, coupled with operator consolidation, dragged North American FY 2025 revenues down to $4.9bn, 19% below the regional peak of $6.1bn in 2023. The opposite was true for Middle Eastern contractors’ revenues, which continued a YoY growth trajectory driven by long-term contracts and some of the highest global dayrates, particularly in GCC countries, where the majority of Middle Eastern land rig demand is located. Thus, contractors in that region registered a FY 2025 revenue of $5.2bn, the highest since the low of $3.4bn in 2021.
Middle East vs North American Indexed Contractor Revenue 2019-2025
Source: Westwood Global Land Rigs, Corporate Financials
Entering 2026, markets anticipated a heavily oversupplied crude environment, with the IEA projecting a surplus of roughly 3.84 mmbpd. However, geopolitical tensions quickly disrupted expectations. Brent averaged $67/bbl in January 2026, 6% higher than December 2025, due to rising Middle Eastern risks. However it was the closure of the Strait of Hormuz and coordinated attacks on regional upstream and refining facilities in March that really ramped up prices, driving Brent to $120/bbl, the highest since June 2022 and leading March to average $102/bbl.
The conflict could have major consequences for the 2026 revenue outlook. The Middle East was expected to widen its lead over North America in 2026, supported by steady oil prices, conservative US E&P budgets and a resumption of Saudi rig activity. Instead, the US–Israeli conflict with Iran has triggered widespread rig suspensions across Iraq, Kuwait, Saudi Arabia and the UAE, with Iraq reportedly the worst affected.
Meanwhile, higher prices may prompt US Lower‑48 operators to revisit their 2026 spending plans, potentially reactivating idle rigs and lifting North American revenues, similar to the 2022 rebound. The situation remains uncertain, though: a peace deal could allow Middle Eastern rigs to return quickly, depending on infrastructure damage, while in the US, a sustained price rally could boost activity as early as 2H 2026. If demand rises sharply, the challenge for US contractors may shift from an oversupply of idle rigs to the rate at which those units can be returned to service.
A deeper analysis of the 2025 financial results, as well as the outlook for 2026, can be found in our recently published insight: Land rig revenues reveal diverging fortunes for North America and Middle East.
This edition of the quarterly newsletter is broken down into the following sections: Oil & Gas Activity, M&A Activity and Geothermal Activity. Key occurrences in the oil and gas activity section include the loss of the 3,000 HP Doyon Drilling 26 rig and Pemex’s 2,000 HP rig 329, both of which were involved in accidents during the quarter. For rig contracting, 26 rig awards were identified in Kuwait to support the NOCs’ exploration and production operations. This edition also includes details of small onshore discoveries made in Egypt, Gabon and Pakistan.
The US dominated M&A activity during 1Q 2026. Devon Energy and Coterra Energy’s US$58 billion merger was the largest deal during the period under review, forming a large‑cap shale operator in the Delaware Basin. The quarter also included a few deal closures, including ADNOC Drilling’s acquisition of a 70% stake in SLB’s land rig business in Kuwait and Oman.
Lastly, 1Q 2026 was a busy quarter in the geothermal market. A series of grants and funding packs were approved to support geothermal drilling and development across Germany, Iceland, Kenya, Portugal and the United States. Six contracts were awarded, two of which were awarded in Poland for exploratory and appraisal drilling. The quarter also saw the conclusion of the Croatian Hydrocarbon Agency’s four-well exploration campaign using Crosco’s 1,000 HP National 402 rig.
Ben Wilby, Manager – Onshore Energy Services
[email protected]
Michela Francisco, Research Analyst – Onshore Energy Services
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