Major rating firm, Moody, has raised concerns that persistently high oil prices or fuel rationing could weaken broader economic activity and ultimately weigh on energy demand.
However, Moody expects earnings growth for Exploration and Production (E&P) and integrated oil companies to remain elevated through 2026, supported by higher commodity prices and modest production growth.
Moody’s report shows that credit conditions for global oil and gas producers strengthened during the first half of 2026, with exploration and production companies leading industry upgrades as higher crude prices improved earnings expectations.
Moody’s upgraded 13 oil and gas companies globally during the first six months of the year, compared with seven downgrades.
While the pace of upgrades slowed from recent years, rating momentum improved markedly during the second quarter following the onset of the Middle East conflict and resulting increase in oil prices.
The report shows that E&P companies recorded six upgrades during the period, the highest of any oil and gas segment.
The number of E&P upgrades in the second quarter was twice that recorded during the first quarter. Oilfield services companies accounted for another four upgrades, all involving offshore operators, while midstream companies recorded three. No integrated or refining and marketing companies were upgraded.
Moody’s expects demand for onshore drilling and oilfield services to remain subdued in the U.S. through 2026, while international and offshore markets provide greater support for service companies.
SOURCE: LEADERSHIP NEWS PAPER
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