The 2025 forecast wasn’t great for the oilfield services (OFS) sector, and the first three months didn’t offer much reason to change it.

That outlook has darkened considerably in April, with President Trump’s on-again, off-again tariffs affecting demand and OPEC’s plans to increase production making more supply available. Oil has slipped about $10/bbl since March 31, from $71.48 to approximately $61.50 as of April 14.

A 2025 playbook can be derived based on an analysis of oil price shocks from the past, Piper Sandler Senior Research Analyst Derek Podhaizer said in an industry note April 14. He reviewed the 2008 financial crisis, the 2014 OPEC/U.S. price war and the 2020 COVID-19 downturn just as OFS companies prepare to deliver first-quarter earnings reports.

“I put out a preview last Monday (April 7) and brought down my numbers,” Podhaizer said in an interview with Hart Energy. “Thinking about just the big four service providers (SLB, Baker Hughes, Halliburton, Weatherford), everything seemed to be a little bit softer around the margin as far as activity and particularly in North America. Mexico has been pretty much a disaster.”

The seven companies in Podhaizer’s note (the others are TechnipFMC, NOV and Tenaris) have felt the pain this month. Baker Hughes, down 14% in April based on closing data April 14, has been the best performer of the bunch. The others have gone down ranging from 16% to 21% after mostly holding steady in the first quarter.

If low prices persist, Podhaizer said, rig counts will start to fall. Baker Hughes reported U.S. oil rigs fell to 480 last week, down from 489 rigs a week earlier and from 506 rigs in the same week a year earlier, he noted.

“I’m not calling it a trend,” Podhaizer said. “I need to see some more weeks. That would be the quickest reaction to an oil price shock I’ve ever seen.”

E&Ps and OFS companies will respond if prices stay in the $60 range, Podhaizer said. His report studied how they did that in 2008, 2014 and 2020.

“It took oil prices seven months to trough in 2008 and 2014, and four months in 2020,” he wrote. “The catalyst for a trough is weakness in oil production (all else being equal on the demand side).”

He said his team will be watching the cadence of oil rig drops and how well production holds up. Historically, it’s taken four months for oil rigs to begin to decline after an oil price shock, although they started falling two months after COVID hit.

History also tells us there will be an upturn, Podhaizer said. If the past is a guide, it will be a V-shaped recovery led by companies with the most exposure in North America.

“With oil price shocks, this is what happens,” he said. “North America underperforms first, but on the recovery, it outperforms the sharpest.”

In the shorter term, earnings reports start this week. Podhaizer mentioned Liberty Energy, which is scheduled to report after the market closes April 16, and Halliburton, at 8 a.m. April 22. He said he’ll be interested in how the messages from the services companies compare with the E&Ps.

“We’re not even 2 weeks into this right now, right. It's hard to be optimistic,” he said. “Oil's sitting here at $61. That has significant repercussions. You have this cast of uncertainty, and the stocks are always going to move off perception, and the perception is, we just don’t really know how the rest of the year is going to shake out.”

It’s going to be a waiting game, he said.

“We have to wait to hear from the service companies,” Podhaizer said. “I think they’re going to try to message ‘continue to do what they do, maximize returns in North America.’ The problem is, the E&Ps report after them, and we're all really waiting to hear what the E&Ps have to say.”

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