HI Uplift: Milestone thinks long term on oil prices

Milestone prefers to take the long view on oil price movements.

It’s a bright, sunny afternoon in Downtown Atlanta on March 9th. Less sunny are the prospects for oil price stability. Brent crude oil prices are trading at around $105 to $108 a barrel, as conflict in the Gulf region flairs. I’m sitting on the third floor of the Signia Hilton hotel on the first day of Verticon 2026 wondering how price hikes will shape the helicopter industry. Fortunately, expert insight is on hand from Pat Sheedy, president and CEO, Milestone and Sebastien Moulin, chief commercial officer.

Caution is the first word from the leasing company. “Around 60% of our fleet is in offshore oil and gas,” said Sheedy. “We  closely monitor developments in the oil markets; however, I think  the link between helicopter supply and demand and the spot price of oil is overstated.”

Neither Milestone nor most of the oil industry manages their business according to short-term oil prices. “Near-term volatility in the price of oil doesn’t have a significant impact on our market outlook  or our investment decisions,” said Sheedy. “Plus, oil has consistently been north of $60 a barrel for a long time.”

‘Investment decisions’

That has provided a stable environment giving the oil majors confidence to plan and to approve final investment decisions on long-term projects. “In turn, that level of visibility has given us a reasonable ability to forecast helicopter demand over time, while also giving the oil companies the confidence they need to move forward with those investment decisions,” said Sheedy. “If we look at the downturn over the past decade, significant costs were taken out of the supply chain – particularly in helicopters – and that cost discipline has been maintained.”

Against that background of relative price stability, Milestone has not forecast significant levels of growth in offshore oil and gas activity. And regardless of whether the price of oil is at $100 a barrel or $50 a barrel, there isn’t a huge amount of further cost to come out of the supply chain – at least on the helicopter side, according to the lessor.

For Milestone so far, the key driver of demand has been fleet replacement rather than significant increases in oil and gas production and exploration. But the company is noticing some moderate increases in demand, focused on specific regions. Those areas include Brazil, some parts of West Africa and in Asia. “We have seen demand, but it has been very moderate levels of demand,” said Sheedy. “And that’s regardless of oil price, so that’s [within the context of oil priced] at $60 or $80 [a barrel].”

‘Deep sea offshore exploration’

So, if oil prices continue to trend upwards, at what point will the oil major be tempted to increase production and exploration? “The oil majors are going to want to see a sustained price levels over an extended period before you see significant incremental deep sea offshore exploration outside of the areas which are currently being explored,” said Sheedy. “Guyana and Brazil, for example, are well established growth markets as it stands, and they’re going deeper and deeper, and I think that trend will continue.”

One shorter term consequence of rising prices may be a re-consideration of the UK government’s policy of limiting oil and gas production from North Sea field. The present policy is one of managed decline with no new licences for oil and gas exploration but a commitment to fields currently in production. “Given what’s happening in the Middle East, if oil prices continue to surge to these levels, you’ve got to ask whether the UK take a different stance on energy security,” said Sheedy. “It’s very much at odds with what we’re seeing in Scandinavian countries. Norway, in particular, continues to develop existing oil fields and encourage exploration for new ones.

Earlier this week, representatives of the UK offshore energy industry urged the UK government to boost production and exploration of North Sea oil and gas. David Whitehouse, chief executive of Offshore Energies UK said: “We urgently need greater supplies of secure, domestically produced energy including oil and gas, which will remain a critical part of the UK energy system and economy for decades.”

‘Continued commitment’

Milestone certainly continues to invest in its offshore business. Last year, from its total investment of about $400m, more than 75% or $300m was invested in offshore. “Over 75% of our new investments in 2025 and 2026 are in oil and gas,” said Sheedy. “That underlines our continued commitment to the sector. We are fortunate that we’re centrally funded from the aircraft balance sheet [of AerCap] – which provides us with long-term financial stability.”

Much depends on the geopolitical situation and how soon conflict in the Gulf can be ended and oil transport through the key Straits of Hormuz resumed, according to the lessor. That’s in addition to a return to Iranian oil exports which, before US sanctions were imposed, were thought to total between 580 – 730 million barrels per year in 2024 – 2025.

“It’s volatile and difficult to predict where prices will go, but at this point, I don’t see a resurgence in deep sea exploration,” he said. “It’s longer-term trends that ultimately determine where we believe demand will come from.”

This week Brent crude oil prices were trading at about $103-$105 a barrel. On Wednesday, Larry Fink, founder, chairman and CEO of BlackRock warned of global recession if oil prices reach $150 a barrel.

$14trn under management

The boss of the investment company, which has $14trn under management on behalf of investors worldwide, set out two likely scenarios for oil prices to the BBC. In the first, oil returns to about $40 a barrel after a speedy resolution to the Iran war and the resumption of Iranian and Venezuela oil exports.

In the second scenario, prolonged conflict – or even dispute – results in oil prices above $100 a barrel and probably at or close to $150 which would “cause global recession”.

Fink does not see a middle way – it will either be one outcome or the other.

Meanwhile, geopolitical uncertainty is not the only thing that concerns Milestone. While Sheedy and Moulin both acknowledge the industry is enjoying a period of welcome stability – after years of turmoil 10 or more years ago – they remain concerned by the spectre of over supply that previously haunted the industry. But that’s a story for another day (very soon). Read our highlights from Verticon 2026 here.