ex/lp.ds or standing jab are probably your best options. If he doesn’t have three meters stocked, expect him to go for overhead or low since they’re safer on block, it’s also a possibility that he won’t do anything, but it’s still -6 on block give or take. Generally if he has meter, let him burn it, don’t worry too much about getting hit by it unless he has three stocks and Ultra, it does pitiful damage (in the grand scheme of things).
ex/lp.ds will at worst trade, it can be beaten out by his flip kick, but his flip kick has a lot of startup in comparison to lp.ds, so even though its invincible, it will almost always trade as Balrog will be well into his active frames. If he does OH, lp.ds recovers first, and you get free back-charge and a cl.hk, cr.mp punish into ex.ru. ex.ds will also beat the low, but he’s considered crouching so no ex.ru. You could also do a delayed ex.ru against OH but it has a lot of startup so it’s only viable if you read it early enough to just wait and delay the ex.ru so you don’t pass under him.
standing jab is an OK punish since it’ll punish him if he just does ex.mk and blocks, but also it may recover in time for you to block all the follow-ups.
Also keep in mind that you can punish his ex.mk, flip kick, FADC fwd with jab (1f punish) or U2. You can punish the FADC back with U1/Super (it’s -10). You can also punish the OH follow up with U2 at certain distances as well.