Service Sector Backlogs Rise 78% in the Middle East as UAE Offshore Output Stays Offline
Oilfield service order books are growing across the Middle East even as close to 2 million barrels a day of UAE offshore output remains shut in by the conflict.
Oilfield service companies are booking future work across the UAE and wider Middle East even as current revenues have declined, Energy Voice reported on Friday (2026-08-07). At least one major sector player logged a backlog increase of 78% year on year. Revenues are down, backlogs are up, and the pattern holds sector-wide — an industry positioned for activity it cannot yet bill.7
The UAE entered 2026 with production capacity of 4.85 million barrels per day, reached by 2024 according to Wood Mackenzie, and a stated target of 5 million b/d by 2027. A $145 billion investment in domestic upstream through 2030 underwrites that programme. But Wood Mackenzie estimated as of May (2026-05-20) that close to 2 million b/d of offshore production remained shut in, constraining any supply increase in 2026 regardless of policy changes.1
The disruption is broad-based. EIA data published May 17 (2026-05-17) assessed that Iraq, Saudi Arabia, Kuwait, the UAE, Qatar and Bahrain collectively halted 10.5 million b/d of crude production in April, a Gulf-wide suspension large enough to restructure global supply balances for months.3
ICE Brent crude front-month was at $83.25 a barrel as of 07:04 UTC on Friday (2026-08-07), down 0.68% on the session. Wood Mackenzie, in a report published July 14 (2026-07-14), forecast a second consecutive annual decline in Asia Pacific LNG demand as the Middle East conflict disrupted regional supply flows, suggesting demand weakness has partly offset the supply disruption in price terms.6
Aberdeen-based Ashtead Technology, which supplies equipment to the offshore sector, offered a direct read on the margin pressure in its half-year results released July 15 (2026-07-15). The company posted H1 2026 revenue of £100.2 million, up 1% against H1 2025, but its EBITDA margin fell to 25.0% from 27.3% in H1 2025. The board said it remained "comfortable with full-year market expectations," conditional on the conflict easing in the second half of 2026.5
That condition defines the sector's predicament. Service companies can execute contracts, grow order books and signal confidence in the forward market. They cannot mobilise to a field that is shut or inaccessible. Fixed costs accumulate. Margins erode. Energy Voice's Friday (2026-08-07) report was plain about the arithmetic: revenues are declining even as the forward book expands.7,5
The UAE has also repositioned its crude commercially for Asian buyers in anticipation of resumed offshore volumes. In early July (2026-07-03), the country shifted the pricing benchmark for its Upper Zakum, Das and Umm Lulu offshore grades from Murban to Dubai crude, oilprice.com reported. Dubai gives buyers a cleaner read on near-term cargo values than Murban, whose forward curve is poorly suited to prompt market pricing.4
OPEC+ politics add a separate tension. The UAE is among producers that have grown frustrated with production policy shaped primarily by Saudi Arabia and Russia, according to OPEC+ sources cited by Wood Mackenzie in May (2026-05-20). But with close to 2 million b/d of offshore capacity shut in, the country's practical ability to increase output in 2026 is restricted whatever position it takes within the group.1
The IMF projected non-oil GDP growth across Gulf states at 4.2% for 2026, unchanged from the 2025 rate, while oil-sector growth was running at just 1.9% against 10.3% in 2022, the Economist reported in May (2026-05-19). The divergence reflects how far Gulf diversification has progressed, but oil revenues still finance it.2
The 78% backlog figure is a forward bet, not a measure of current output. With offshore fields largely inaccessible and no clear timeline on the conflict, the contracts being signed in August 2026 could remain unexecuted well into 2027. The pace at which those order books convert into billed activity will be the market's clearest read on when Gulf production is genuinely recovering.1,7