Global economic volatility, including ongoing tariff uncertainty, is leading oil and gas producers to plan more conservatively for the rest of the year than anticipated, they said, although though the longer-term oil and gas outlook remains bullish. The U.S. and Mexico are showing particular weakness even as shale oil and gas technologies developed in the U.S. over the past 20 years spread worldwide from Argentina to Australia, said Halliburton chairman and CEO Jeff Miller during the July 22 earnings call.

“To put it plainly, what I see tells me the oilfield services market will be softer than I previously expected over the short to medium term,” Miller said, arguing that oil producers and countries are cutting back spending more dramatically than current oil prices would normally necessitate. The U.S. oil pricing benchmark is about $66 per barrel, and it would need to rise well above $70 to be considered relatively healthy for the industry.

What that means for Halliburton and SLB is focusing more on technology and some of their service specialties while retiring some equipment and well completions—or fracking—fleets.

“We’ll clearly stack some fleets just because we’re not going to work at uneconomic levels,” Miller said. “It’s strategic for us, and it takes some equipment out of the market as well. But, from our perspective, working at uneconomic levels literally burns up equipment, creates HSE (health, safety, and environment) risk, and all sorts of things that we just don’t want to do.”

On the other hand, Halliburton (194 in the Fortune 500) is growing market share with its new autonomous and electrified fracking fleets, called Zeus IQ, and has partnered with Chevron (No. 16 in the Fortune 500) and others. Halliburton first developed early hydraulic fracturing, or fracking, techniques more than 75 years ago under founder Erle P. Halliburton.

For all of 2025, Halliburton now estimates its North American revenues will decline by more than 10%.

Halliburton reported second-quarter revenues that fell nearly 6% from $5.83 billion to $5.51 billion year over year. Net income plunged 33% from $709 million down to $472 million.

The biggest oilfield services company in the world, SLB (479 in the Fortune Global 500), formerly Schlumberger, also saw its quarterly revenues dip 6% year on year to $8.55 billion. Net income of $1.01 billion fell by 9%.

Oilfield outlook

OPEC and its allies have surprised much of the energy industry since this spring by unwinding years of voluntary production cuts more rapidly than anticipated to gain back market share. Dumping those new barrels on a saturated global marketplace Is adding to the weaker oil price environment, leading U.S. oil and gas producers and others to cut back spending and, in many cases, oil and gas volumes.

Adding to the weakness is the oilfield services sector becoming a victim of its own success. Efficiently gains now allow producers to extract more oil and gas per location without requiring as many drilling rigs and fracking fleets.

In mid-July, SLB closed its nearly $8 billion acquisition of ChampionX. The merger gives SLB a stronger footprint in artificial lift and production chemicals. Such services keep the oil and gas wells flowing optimally long after they are drilled and put into operation, which CEO Olivier Le Peuch said helps SLB avoid some of the industry’s inherent cyclicality. Even as drilling activity slows down, the existing wells still need just as much servicing and maintenance.

In fact, the number of drilling rigs active in the U.S. has fallen by 7% in the past 12 months, down to 544 active rigs, according to research firm Enverus, and the decline is expected to continue. Nearly half of all the active rigs are in the still-booming Permian Basin in West Texas and southeastern New Mexico.

“As we have seen more recently, the short-cycle markets have been more reactive to the persistent slightly lower commodity price than anticipated,” Le Peuch said. “Yet, all in, we are seeing this as a resilient market going forward.”