Investing.com -- Piper Sandler on Tuesday upgraded Halliburton and Patterson-UTI Energy to Overweight from Neutral, arguing that despite ongoing geopolitical uncertainty in the Middle East and oil price volatility, improving U.S. land activity and a stronger long-term energy security outlook create an attractive entry point for the stocks ahead of second-quarter earnings.

The brokerage said the oilfield services sector remains in a "feeling of limbo" after crude prices surged above $110 a barrel during the U.S.-Israel-Iran conflict before retreating to around $70 following a June ceasefire. Renewed tensions around the Strait of Hormuz have since pushed prices back toward $75, leaving investors cautious over the remainder of 2026 while supporting a more constructive outlook for 2027 and 2028.

The preview underscores how geopolitical tensions and volatile oil prices are reshaping expectations for the oilfield services sector ahead of second-quarter earnings. While near-term uncertainty tied to the Middle East conflict continues to cloud investor sentiment, Piper Sandler believes improving U.S. land activity, firmer pricing and a stronger long-term energy security outlook position select service providers to outperform, prompting upgrades for Halliburton and Patterson-UTI.

Piper expects improving U.S. drilling activity, rising frac utilization and firmer pricing to support earnings revisions, highlighting Halliburton, Patterson-UTI, Liberty Energy and ProPetro as the companies most likely to deliver "beat-and-raise" quarters. It also cited Halliburton's stake in VoltaGrid and recent international contract wins as additional long-term growth drivers.

The brokerage, however, turned more cautious on Weatherford International and Flowco, citing risks to 2026 estimates from continued Middle East disruptions and higher operating costs, respectively. It maintained a positive long-term view on offshore services, expecting an upcoming wave of rig upgrades and stronger LNG investment to support the sector over the next several years.