Shale Slowdown? Halliburton Sounds the Alarm
Tsvetana Paraskova

The heightened oil market and macroeconomic uncertainties in recent weeks are baffling not only analysts. Halliburton, the oilfield services giant with the highest exposure to the U.S. fracking market, has just warned investors that its U.S. customers are re-evaluating drilling activity plans for 2025.

“Looking forward, many of our customers are in the midst of evaluating their activity scenarios and plans for 2025,” Halliburton’s chairman, president, and CEO, Jeff Miller, said on the first-quarter earnings call this week.

Halliburton reported Q1 revenues, beating analyst expectations. Earnings, excluding a pre-tax charge of $356 million, were in line with estimates.

However, North America revenue in the first quarter of 2025 fell by 12% from a year earlier to $2.2 billion. Halliburton said the decline was primarily driven by lower stimulation activity in U.S. onshore operations and decreased completion tool sales in the Gulf of Mexico.

International revenue also fell, but only slightly, by 2% versus the first quarter of 2024.

Analysts were closely watching Halliburton’s Q1 figures – which kicked off the earnings reporting season of the big oilfield services providers – for clues about where North America drilling is heading amid uncertainties about the economy and the willingness of oil producers to keep drilling activity levels as U.S. benchmark oil prices fell into the low $60s per barrel.

The macroeconomic uncertainty, the cost of equipment with the Trump Administration’s tariffs, and the oil prices barely at breakeven levels at some fields and wells have prompted analysts to lower their estimates of U.S. oil production growth this year and next.

“Activity reductions could mean higher than normal white space for committed fleets, and, in some cases, the retirement or export of fleets to international markets,” Halliburton’s Miller said on the earnings call.

“The last three weeks have been highly dynamic as the trade environment injected uncertainty into markets, raised broad economic concerns, and along with faster than expected return of OPEC production weighed on commodity prices,” the executive added.

Apart from heightened macro and oil price uncertainties, Halliburton flagged it would be hit by the U.S. tariff policies—in the region of $0.02 to $0.03 per share impact on the earnings per share for the second quarter of the year. 

“We are doing a lot of work on mitigating the impact of tariffs. We have a well diversified supply chain,” Eric Carre, Executive Vice President and Chief Financial Officer at Halliburton, said on the earnings call.

“We have a lot of levers we can pull. But really, to be more clear in terms of the overall impact, we need a bit more clarity and stability in the structure of tariffs, so that we can really understand what levers we can pull and then what the overall outcome is going to be,” the executive added. 

“So there’s just a lot of moving parts right now. And I think we’ll be able to give you more color in three months from now.”

Halliburton’s warnings about uncertain drilling plans by U.S. onshore producers, the impact of the tariffs, and concerns about the macro environment sent its shares plunging by 5.5% at close on Tuesday in New York.

While public statements from the U.S. oil lobby and oil producers welcome President Donald Trump’s rollback of regulations and eased permitting processes, executives are privately fuming about the administration’s perceived target to bring oil prices down to $50 a barrel.

U.S. Energy Secretary Chris Wright, the former boss at fracking firm Liberty Energy, remains bullish on U.S. oil production—and believes that the industry will not only survive but thrive even with oil at $60 or below.

Yet, the industry begs to differ—at least that’s what executives wrote anonymously in March in comments to the quarterly Dallas Fed Energy Survey for the first quarter.

“There cannot be "U.S. energy dominance" and $50 per barrel oil; those two statements are contradictory. At $50-per-barrel oil, we will see U.S. oil production start to decline immediately and likely significantly (1 million barrels per day plus within a couple quarters),” an executive at an exploration and production firm said.

Another executive put it even more bluntly, “The administration’s chaos is a disaster for the commodity markets. "Drill, baby, drill" is nothing short of a myth and populist rallying cry. Tariff policy is impossible for us to predict and doesn't have a clear goal. We want more stability.” 

Stability and clarity are what Halliburton’s executives say they need to assess how the oilfield services giant should approach the new market realities.  

By Tsvetana Paraskova for Oilprice.com

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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