Baker Hughes Sees Global Oil Spending Dip Amid Middle East Conflict

Baker Hughes has announced that global oil producer spending is expected to decline modestly this year. According to the company, growth in regions such as Latin America, offshore Africa, and North America land will offset lower spending in Europe and the Middle East.

The company cited the ongoing conflict in the Middle East as a major reason for the cautious stance taken by producers. CEO Lorenzo Simonelli stated that customers are focused on maximizing production from existing assets while preserving flexibility to respond to evolving market conditions.

Baker Hughes also reported a record $7.1 billion in industrial and energy technology orders, which was up significantly year-over-year. However, the company warned that its IET segment is expected to face a one per cent-two per cent revenue hit due to disruptions caused by the conflict.

The Middle East conflict has forced producers to take a more cautious stance instead of increasing drilling activity. Baker Hughes expects some increase in logistics and inflationary pressures at its regional facilities during the third quarter, but notes that this will be offset by strength in regions outside the Middle East.