What happened
Turmoil in Europe drove oil prices higher on Monday. That led to a rise in the prices of many energy-related companies.
Here's how some of the major oil and gas service providers fared today:
NYSE: RIG
Key Data Points
So what
Oil prices surged as high as $130 per barrel before pulling back, following reports that U.S. and European officials were considering a ban on purchases of oil and natural gas from Russia due to the events in Ukraine. Energy prices have risen sharply in recent weeks after conflict broke out in the region.
Image source: Getty Images.
Oil and gas producers typically become more profitable when prices rise. They also tend to increase their investments to ramp up production. This can be a boom for energy service providers.
Transocean, the world's largest offshore drilling contractor, could benefit from increased demand (and, by extension, higher day rates) for its rigs. Meanwhile, Schlumberger and Halliburton could see their profits soar, if U.S. and international producers bring more projects online to make up for any potential loss of oil and gas supply from Russia.
Now what
Whether or not governments impose a ban on Russian energy assets, the U.S. and many other nations will likely take action to reduce their dependence on the country. The European Union, for its part, will seek to reduce its reliance on energy imports from Russia by as much as 80%, according to Bloomberg.
The U.S. and E.U. will likely need the help of the energy services giants to help them accomplish these aims.
