Energy investors are on edge over the run-up in oil prices triggered by the U.S.-Israeli attack on Iran that began in late February. 

While in constant flux, oil prices have risen by about 50% since then, sending Brent crude to highs not seen since 2022. Energy experts say the oil market likely won’t fall back to pre-war prices until 2027.

The Iran war and its oil price boost have largely supported energy stocks, with the benchmark S&P Global Oil Index up 8.7% in the last month and up 31% year-to-date, well ahead of the S&P 500’s -3.6% return over the same timeframe.

In general, investors don’t like volatility, and that’s exactly what they’re seeing in the global oil market right now, especially with the Iran-fueled oil crunch in the Straits of Hormuz, where the Middle Eastern country normally ships nine to ten million barrels of oil per day in peacetime, but that’s not happening now.

Despite this volatility, Wall Street energy analysts are unanimous in liking this one stock.

“Roughly 20% of global seaborne oil trade, and a similar share of liquefied natural gas, flows through the strait, making the duration of disruption the key determinant of further energy price spikes,” said Fei Xu, Vanguard commodity strategy fund portfolio manager, in a new research note. “Near-term prices have spiked as supply has been curtailed.”

This Oil Services Stock Makes Sense During Oil Market Instability

One energy stock that should survive and even thrive in the Iran conflict is Schlumberger (NYSE:SLB).

Currently trading at around $48 per share and up 7% over the past week, SLB is an analyst favorite right now, as analysts view the stock as a top-tier play in the profitable global oil services sector. The company’s breadth of customers in the U.S. and abroad gives Schlumberger a steady source of revenues, robust margins, and an orders backlog that’s the envy of the industry.

While the international spotlight is on Hormuz and Iran, SLB is busy cutting deals with global oil-producing heavyweights with deep pockets. On March 17, Schlumberger announced a sizable technology deal with China National Offshore Oil Corp. to develop and support 20 wells in the South China Sea, in the deepwater Kaiping 18-1 field. The move is another example of SLB expanding its overseas footprint, with the company generating over $3 billion in digital-related revenue annually.

On the financial front, SLB reports total revenue of $35.7 billion and a three-year revenue growth rate of 8.3%. Operating margins are in line at 15.28%, and the debt-to-equity ratio is 0.45, indicating that Schlumberger is keeping a close eye on costs. The company also has a rich history of supporting shareholders and promises to steer $4 billion in revenue back to its investors this year, buoyed by a 3.5% quarterly dividend increase.

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Lower Downside and Higher Upside For SLB Shares

Like most oil industry stocks, SLB is not without potential downsides. 

A case in point. Schlumberger’s C-suite has acknowledged that higher tariffs and rising OPEC+ production are expected to weigh on the market, leading to a projected decline in global upstream spending in 2025 compared with 2024. “Despite ambitions to achieve 25% EBITDA margins by 2025, management recognizes that tariffs present a significant headwind to achieving this target,” Benzinga analysis noted.

On the upside, SLB continues to see burgeoning customer traction, especially in its digital manufacturing facility in Shreveport, Louisiana. Additionally, SLB’s current valuation, represented by an 8x multiple, “reflects a premium compared to industry averages, driven by its high-graded portfolio and anticipated expansion in its data center exposure, which is projected to be a significant growth driver in the latter half of 2025 and beyond,” Benzinga analysis stated.

Wall Street analysts are on board, too.

This week alone, Stifel Nicolaus held its Buy call on SLB shares, with a $56 price target, representing a 17% share price upside. Meanwhile, Scott Gruber at Citi reiterated his buy call on the stock and also set a $56 price target. Of 14 energy industry analysts, all have a Buy call on Schlumberger, which is a big vote of confidence in an oil company facing inordinate market volatility in the Middle East right now.

By any account, SLB is navigating those issues like a champ, and investors might want to consider following in Schlumberger’s wake.