LNG demand continues to grow despite geopolitical risks
Despite supply disruptions and geopolitical instability, global demand for liquefied natural gas remains strong, driven by the growth of data centers and the advancement of AI. Baker Hughes has exceeded expectations in both revenue and profit, and the long-term outlook for the LNG market remains positive.
Petrus
Demand for liquefied natural gas (LNG) remains high despite recent supply disruptions and price fluctuations caused by the conflict in the Middle East. Long-term LNG consumption is being driven by the growing number of data centers.
Baker Hughes has maintained its forecast for global installed LNG production capacity to reach 800 million tons per year by 2030 and 950 million tons per year by 2035. Energy markets continue to adapt to the situation in the Middle East, where attacks on LNG production facilities in Qatar and the effective closure of the Strait of Hormuz have led to a significant reduction in LNG supplies to global markets.
The recovery of the LNG market will take time due to the complexity of restoring liquefaction capacity, the need to rebalance trade flows, and replenishing reserves. Recent events have not affected the long-term outlook for the LNG market.
Global demand for natural gas for electricity generation remains strong, supported by the rapid growth of artificial intelligence.
Orders in Baker Hughes’ Industrial & Energy Technology (IET) segment doubled in the second quarter compared to last year, reaching $7.1 billion. The division’s revenue was only slightly impacted by the conflict in the Middle East. IET provides equipment, software, and services for sectors such as LNG, emissions management, and hydrogen.
The impact of disruptions in the Middle East is expected to remain moderate, though there may be increased logistical and inflationary costs at regional facilities in the third quarter.
Revenue in the Oilfield Services & Equipment (OFSE) segment in the Middle East fell by 1% compared to the first quarter and by 10% compared to the fourth quarter of 2025. Overall, OFSE activity in the region is expected to remain stable, with moderate growth in most other markets and significant revenue growth in subsea production systems, as well as a slight improvement in segment margins.
Baker Hughes shares rose nearly 6% in U.S. trading after the release of its second-quarter report, in which the company exceeded revenue and EBITDA forecasts. Orders across all segments were significantly above expectations. In the second quarter, EBITDA exceeded forecasts by 8%. Over the past six quarters, the company has on average outperformed EBITDA forecasts by 7%.