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When the political climate heats up and markets cool down, the default reaction in our industry is to stop, wait, and hope for the best. Hiring freezes, projects are shelved, and everyone retreats until things “normalize.”

But what if that playbook is broken?

For decades, the oil and gas industry followed long commodity cycles — a few good years, followed by a few bad ones. But more recently, these cycles have shortened. The triggers for downturns now come from every angle: pandemics, trade wars, and geopolitical ruptures. And the durations? Shorter, sharper, and far less predictable.

That’s why simply waiting out the storm no longer works. By the time the cycle turns, you’re already behind. Playing catch-up in this environment is costly — not just financially, but strategically.

Which is why it may be time the industry took a different approach: Invest during the downturn.

Don’t get me wrong, it’s easier said than done — investors don’t like it and markets resist it. But in today’s energy landscape, waiting for stability is a luxury companies don’t often have. So instead of cutting costs, one could argue investing against the cycle may be the more fruitful alternative. 

Think about the savvy investors who, in the 2008 real estate crash, were snatching up property for cents on the dollar when everyone else was selling. Looking back, it was the right thing to do. Some people would go as far as to say, it was genius! They made a fortune simply because they were the only buyers.

So, my question is, why can’t we in the energy sector do the same? It’s obviously calculated risk, where we can invest countercyclically as we know very well that the industry is bouncing back. The truth is the world will always need oil and gas — and a lot of it — for the foreseeable future. Why not use the dip to invest? 

I must reiterate that this isn’t about being bold. It’s about being ready. You must always remain a reliable supplier to your customers.

It’s also important to remember that our customers, the national oil companies, are taking a longer-term view of oil fundamentals. It’s encouraging to know the outlook for overall energy demand remains robust, and there is a lot of discussion around the acceleration of data center buildout and AI chip power demand, particularly when it comes to gas development. 

As a company, if you’re small enough to be agile, but large enough to scale, that’s your window. Because while downturns expose weaknesses, they also reveal who’s actually planning for the future.

Sherif Foda

The key factor to consider for crude, for example, is that oil demand per capita across much of the developing world, and in massive countries like China and India, lags significantly behind consumption per capita in many Western countries. The demographic shift, with global south populations increasing much faster than those in the global north, means their energy demand overall will be the main driver and will surely seek affordability before anything else.  

That means that readiness, in our region, is a necessity. The Middle East lives under the constant shadow of possible conflict. If a broader escalation breaks out, shutting down a major gas field would shake the global energy market overnight. That risk isn’t theoretical, as the region has several unsolved conflicts.

Taking all the above into consideration, investing now means securing lower cost suppliers, getting the best market deals, and planning for your customers. If you are an operator, then you can enhance your buffer of supply capacity and prepare to capture the higher oil and gas prices. If you are a service company, then you have the agility and readiness to take multiple contracts and larger size business at a lower cost. 

Adding the human element to it is a huge advantage, as you equip your company with local talent on the ground, which eliminates logistical challenges like visas and restrictions. Having said that, you would need the flexibility and HR options and regulation to be able to put people on leave or standby until business is up and running, but again, you can use the idle time for training, personal development and lots of other optionality if the organization is lean and agile to change.

But let’s be honest, it’s no walk in the park trying to convince shareholders of all the above. Public companies often suffer from short-termism. Everyone wants results, and they want them now. They want their dividends and demand to see growth in returns sooner rather than later, which is very difficult to achieve in a lower oil price environment. 

So, investing in a downturn brings uncomfortable questions like, ‘Where’s the cash flow?’ and ‘Why aren’t you cutting back?’ But long-term value doesn’t emerge from panic-driven decisions. It comes from buying smart, negotiating hard, and using moments of contraction to prepare for the next phase of growth.

As a company, if you’re small enough to be agile, but large enough to scale, that’s your window. Because while downturns expose weaknesses, they also reveal who’s actually planning for the future. You can’t outsource resilience. You must build it — brick by brick, hire by hire, and decision by decision.

And you start when everyone else stops.

• Sherif Foda is chairman and CEO of NESR.