Baker Hughes Forecasts Modest Decline in Global Oil & Gas Spending for 2026

Oilfield services provider Baker Hughes expects a modest decline in global spending by oil and gas producers this year, citing a complex mix of regional growth and geopolitical headwinds.

Shifting Investment Patterns

In a conference call with analysts on Monday, the company projected that growth in capital expenditure across Latin America, offshore Africa, and North American land operations would be counteracted by lower spending in Europe and the Middle East. The forecast highlights a significant regional divergence in energy investment strategies for 2026.

The cautious outlook comes as producers navigate ongoing market uncertainty. "Customers remain focused on maximizing production from existing assets while preserving flexibility to respond to evolving market conditions," said CEO Lorenzo Simonelli on the call.

Middle East Conflict Weighs on Outlook

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The ongoing conflict in the Middle East was identified as a key factor driving producer caution and impacting Baker Hughes' own operations. The company warned that its Industrial and Energy Technology (IET) segment is expected to see a 1%-2% revenue hit due to disruptions from the conflict.

For the third quarter, Baker Hughes forecast IET revenue between $3.17 billion and $3.47 billion. This projection falls below the analyst consensus of $3.79 billion, according to data compiled by LSEG. Chief Financial Officer Ahmed Moghal noted the company anticipates "some increase in logistics and inflationary pressures at our regional facilities" but expects the impact to be offset by strength in other regions.

Company Performance

Despite the tempered forecast for industry spending, Baker Hughes reported strong individual performance. The company's shares rose more than 6% on Monday after it beat quarterly profit estimates. Its IET segment also secured a record $7.1 billion in orders, a figure that doubled year-over-year.