A drilling boom in America’s oil heartlands has triggered a sharp reversal of fortunes for the country’s long-suffering oilfield services groups as they reap the rewards of the scramble to pump more crude.

Many producers have rushed to open the taps to capitalise on soaring oil prices since Russia’s invasion of Ukraine, ratcheting up demand for the companies that drill and frack new wells.

“At $100 oil, everything is busy,” said Jeff Miller, chief executive of Halliburton, one of the world’s biggest oilfield services companies, whose profits jumped more than 50 per cent in the first quarter.

The sector, responsible for the grunt work across the US oil patch, has been slow to recover since the pandemic-induced price crash of 2020 sent scores of companies into bankruptcy.

But high prices have spurred renewed activity in US oilfields, largely driven by private operators. The rig count is up 20 per cent since the start of the year and nearly 60 per cent over the past 12 months, according to data from Baker Hughes, one of the oilfield services companies.

The frac spread, which measures the quantity of fracking equipment in the field, has jumped 15 per cent this year according to data provider Primary Vision. In the Permian, by far the largest US oilfield, approvals for new well permits hit a record in March.

“The level of demand for the services has finally gotten to a point where the service companies can turn around and start charging more,” said Rob Mathey, senior analyst at consultancy Rystad Energy. While last year any increase in prices was just passing on mounting costs, he added, the sector had been able to start increasing margins in the first quarter of this year.

The competition for service companies’ business marks a welcome change after recent years of suppressed pricing and profitability because of a glut of rigs and other fracking equipment built as the shale boom gathered pace a decade ago. Rystad estimates that the industry will be able to increase margins by 10-20 per cent in 2022 compared with late 2021.

Olivier Le Peuch, chief executive of Schlumberger, the world’s biggest oilfield services group, said last week the uptick was contributing to “one of the strongest outlooks for the energy services industry in recent times”, adding that conditions were “extremely favourable for pricing power”.

Crude prices have surged past $100 a barrel in the wake of Moscow’s invasion of Ukraine, fuelling inflation around the world and setting off a frantic search for more supplies to help bring prices down.

President Joe Biden’s administration has lobbied Saudi Arabia and other countries in the Opec-plus alliance of producers to accelerate new production, and pursued new diplomatic deals with Iran and Venezuela that could unlock supply currently under US sanctions.

With little to show for those efforts, the administration has increasingly leaned on the domestic oil and gas industry to ramp up output.

The uptick in drilling has not been universal. While privately held operators have switched to growth mode, big publicly listed producers have been restrained by pressure from Wall Street investors to limit spending and funnel the windfall from high prices back to shareholders through dividends and share buybacks.

Still, the market for new equipment and skilled workers to man rigs and truck equipment across the oilfields has quickly tightened after years of limited investment.

“There is starting to be a little bit of a competition for [fracking] fleet,” said Chris Wright, chief executive of Liberty Oilfield Services, which operates fracking equipment across the US. “Not everyone that wants a fleet or wants an extra fleet today, frankly, is going to get one.”

“Halliburton’s hydraulic fracturing fleet remains sold out and the overall market appears all but sold out for the second half of the year,” said Miller. “[Tightness] exists across the whole oil and gas value chain, in spare parts, engines, electronics and many other inputs that cost more and are sometimes not immediately available.”

Raoul LeBlanc, vice-president at S&P Global Commodities Insights, said inflation for US oil producers was running at about 15 per cent this year and could rise to 25-30 per cent next year if companies try to further increase drilling activity. That could sharply push up the oil prices American producers need to justify new drilling.

But services providers are hesitant to ramp up investment in crews and equipment too quickly for fear of being left exposed if the market turns sour again.

“I’m not going to go wild with capex, bringing a whole bunch of stuff off the fence, unless I’m confident I get paid for it,” said Stuart Bodden, chief executive of Ranger Energy Services, which operates the country’s largest active fleet of workover rigs, used to maintain and extend the lives of wells.

“We’ve all learned in the past where we see demand coming in, people come in and say, ‘oh, I want it’,” he added. “We spend money, and then six months later, they go, ‘oh, you know what, we decided we don’t want that after all’. I think we all know that if we go and build a bunch of equipment all we’re doing is shooting ourselves in the foot.”

However, there is growing confidence in some corners that with global oil supply expected to be tight for several years, the drilling boom will last.

Halliburton’s Miller said he expected “very busy years ahead” for his company in an “accelerating multiyear upcycle”.

Investors are starting to pile back into oilfield services shares on signs of rising profitability after years of weak returns. The S&P Oil and Gas Equipment and Services index is up about 35 per cent since the start of the year, a period when the S&P 500 has declined by 10 per cent.

Moody’s, the credit rating agency, said in a recent report that earnings at the big global oilfield services firms could rise by more than 10 per cent this year, with an even bigger jump for smaller US drillers.

Industry executives say the biggest challenge faced by services groups seeking to ramp up drilling was finding workers in a tight US labour market.

Wright said he used to be able to attract blue-collar workers from around the country to the oilfield’s harsh working conditions with higher pay, perks and a schedule that put them in the field for two weeks and then at home for two weeks.

However, he said that model was no longer working as well, given strong demand for the same pool of workers from the booming construction and trucking industries.

“Labour could be the big winner out of this,” said LeBlanc. “They’re going to have to bribe people to go back and live in these places.”