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Crude and Unusual Profits

Posted October 15, 2026

Dan Amoss

By Dan Amoss

Crude and Unusual Profits

Editor's Note: Hey, Sean here.

Most investors look at the Middle East chaos and ask where oil prices are going. But predicting crude prices is hard enough without guessing which refinery, pipeline, or tanker will get hit next.

The hardest-working man in the newsletter business, Dan Amoss, thinks there's another way to play this mess.

Whether oil goes to $60 or $160, producers still need to drill wells, maintain equipment, replace broken parts, and get their product to market. The more complicated that job becomes, the more valuable the companies that make it possible become.

Last month in Strategic Intelligence, he identified five companies that provide the rigs, machinery, services, and expertise the oil industry can't do without. Some are trading at valuations that suggest Wall Street hasn't quite caught on. Today, Dan shares those ideas with you.

And now, over to Dan. 

Crude and Unusual Profits

It’s Friday rush hour.

Traffic flows smoothly on the six-lane highway until a sudden pileup shuts down two lanes.

Taillights flare, brake pads burn and thousands of vehicles grind to an absolute crawl.

We’ve all been there.

And a similar scenario is playing out across global oil transportation today.

For decades, the energy economy relied on frictionless, high-volume superhighways like the Strait of Hormuz and Russian pipelines routing crude to European refineries.

Today, those freeways are blocked by the equivalent of fiery wrecks.

Threats from Iranian radicals and proxies in the Persian Gulf and Red Sea have driven insurance premiums on oil tankers to prohibitive levels. And repeated drone strikes have knocked Russian refineries offline.

Yet global demand remains virtually unchanged.

Consumers still demand every molecule of oil, so crude must keep moving through expensive detours, including shipping routes around the Cape of Good Hope.

Gridlock at the Wellhead

But bottlenecks are not limited to maritime traffic.

A single automated well cluster funnels immense rivers of crude into the network. Physical strikes on these nodes can instantly disrupt the entire downstream flow.

When critical pipes and facilities are hit, the wellhead cannot simply keep pumping.

Operators must shut in giant wells under emergency conditions. Sudden shut-ins can trigger pressure imbalances, sand blockages and other operational problems.

Remediating a damaged superfield can demand huge expenditures, weeks or months of downtime and urgent cleanouts or even re-drilling.

Keeping global supplies moving requires specialized crews and heavy machinery to repair the damage and drill alternative off-ramps.

That shifts pricing power toward the oilfield equipment and service providers that keep the system running. Here are five of these companies from our Strategic Intelligence portfolio:

Transocean Ltd. (NYSE: RIG): The Fleet

When high-risk offshore waters demand rapid development of secure reserves, Transocean provides the heavy machinery.

But building one of today’s most advanced deepwater drilling ships costs $1 billion; with zero newbuild orders globally, Transocean’s ultra-deepwater fleet is virtually irreplaceable.

At the same time, high-spec drillship utilization is approaching 100%, so Transocean’s pricing power is strengthening.

The upcoming all-stock merger with Valaris will create a combined fleet of 73 rigs with a $10 billion backlog. Critically, Transocean will apply its disciplined pricing strategy to Valaris’s historically underpriced fleet, turning idle capacity into a high-margin cash machine.

Even before the merger, Transocean’s results are starting to impress after a long depression in offshore drilling. In Q2 2026, it achieved average day rates of $455,500 for ultra-deepwater rigs at 97% utilization, generating $212 million in free cash flow.

Patterson-UTI Energy (NASDAQ: PTEN): The Crew

Patterson-UTI is the domestic workhorse of North American land drilling.

By avoiding speculative exploration, Patterson functions as an integrated onshore tollbooth, collecting a profit on every vertical foot drilled and every gallon of fluid pumped downhole.

Patterson’s scale has improved in the 2020s through its merger with NexTier and the acquisition of Ulterra drill bits.

The company is entirely sold out of its premium, top-specification APEX drilling rigs, with no excess capacity across natural gas-fueled field assets. Its completions and fracturing fleet is similarly running at near 100% utilization.

Management recently negotiated and won 10% price increases from major customers, with leading APEX rigs on track to earn $40,000 per day by late 2026.

PTEN shares trade at an attractive valuation on many metrics. The stock could rise to $60 over the next few years based on past drilling booms and the financial maneuvers the company has made in recent years.

NOV Inc. (NYSE: NOV): The Foundry

NOV holds a dominant position in the industry’s critical hardware.

It manufactures the top drives, mud pumps and blowout preventers found on many rigs around the world.

Running these rigs at maximum capacity to remediate damaged fields causes wear and tear, driving a steady stream of high-margin parts replacement revenue to NOV.

NOV is generating close to $9 billion in revenue and $1 billion in free cash flow at the trough of the cycle, yet it still trades near 1x sales.

DNOW Inc. (NYSE: DNOW): The Warehouse

DNOW is the parts supplier keeping the entire field from grinding to a halt.

DNOW functions as the ultimate industrial hardware store for the energy patch, collecting steady margins on every pipe, valve and fitting required to move molecules through complex routes.

As a pure-play distributor, DNOW does not take on speculative geological risk.

Instead, it buys in bulk from manufacturers and resells directly to the field, capturing a highly predictable toll on the volume of physical inventory moving through the supply chain.

SLB (NYSE: SLB): The Navigator

As the global energy map fragments and capital migrates into complex offshore and international basins, operators face geological and technical hurdles.

They must map reservoirs with precision and squeeze every drop of efficiency out of existing wells.

SLB, the king of oilfield services, uses machine learning and data analytics to help operators bypass the global gridlock.

In the second quarter of 2026, revenue rose 3% from the previous quarter to $8.97 billion, driven by a rebound in U.S. shale completions and improving international offshore activity.

For investors who want exposure to the brains behind the global oil network, SLB is a core holding.

Back to that Friday evening gridlock.

Frustrated drivers do not simply decide they no longer need to get to their destinations. They find alternate routes.

Global energy markets work the same way — especially when the usual pathways are blocked.

And when the detours get longer and more expensive to navigate, these five companies provide the equipment, services and expertise to keep the oil moving.

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