Bernstein analyst Guillaume Delaby laid out a case on Wednesday that echoes the dynamics of the 1970s oil supercycle, suggesting a similar extended boom may be forming in Middle Eastern oil services.
Delaby employs a vivid metaphor in his note, describing oil as "the wolf" when used as a political weapon through elevated prices. He draws a line from that metaphor back to the 1973 Yom Kippur War, which he says "unleashed the wolf" and sent crude from a long period of stability into a sharp rise. According to the analysis, crude climbed roughly threefold over 1974-75 and ultimately hit $37 per barrel in 1981.
The firm highlights the windfall that the previous supercycle created for sector bellwether SLB, noting that SLB's revenues, net income and market cap rose "6x, 14x and 20x respectively over 1973-80." Bernstein also points to valuation parallels: SLB's EV-to-revenue multiple in 1971-72 was 1.62x, a figure Bernstein says is "coincidentally similar" to the aggregated sector EV/revenue multiple of 1.72x observed in March 2026.
During the 1970s expansion, SLB's average EV/revenue rose to 3.2x, a move Bernstein characterizes as potentially meaningful when viewed alongside current market data. Delaby argues that several contemporaneous factors support the possibility of another extended upcycle: sentiment in the sector had been improving prior to the Iran crisis; Bernstein estimates that "90% of current E&P capex" only sustains existing production rather than adds new output; exploration activity has fallen for 12 years and may now need to revive; and there are new, lower-cost offshore basins to be developed.
On the outlook for companies, Bernstein expects "all our covered companies to benefit - either directly or indirectly." In the nearer term, the note identifies firms with limited Middle East exposure but strong leverage to North American markets as likely early beneficiaries as oil-services equities begin to re-correlate with oil prices. Named examples include Tenaris, Vallourec, Viridien and SLB.
Implications and context
The note connects historical precedent and present-day metrics to make a case that structural supply and investment dynamics, together with geopolitical risk, could produce industry-wide gains similar in character to those seen in the 1970s supercycle. Bernstein frames both valuation comparisons and operational indicators as supportive of its view, while identifying specific companies and regional exposure patterns that could shape near-term winners.