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Oil is holding near a seven month high as investors away the next round of US Iran talks on Thursday. Concerns about potential fallout from a US strike on Iran or Iran closing the straight of horror moves have helped drive oil higher this year despite expectations of a global glut. Baker Hughes CEO Lorenzo Seminelli joins US now from Washington, d C, where he is attending the Transatlantic Gas Security Forum and Energy Aspects Conference. Lorenzo, thanks very much for
your time. What do you make, first of all, the of the market right now. I mean, prices have been driven higher, but we're still looking at a six handle on NIMEX, and it seems like if there is a conflict in the Middle East, that can go much higher very quickly.
Well, great to be with you, and I I think we all know that the aspect of price is very much driven by geopolitics and also what's happening day to day, and it's hard to predict what's going to take place. I think what we look at from a Baker use perspective is the fundamentals and when we look at the
long term. Demand is increasing, and we're going to need to see the supply come online as we look at the back half of twenty six into twenty seven, so it will be range bound, but again it's going to be driven by other factors than just the demand and supply at this moment, and you're seeing it increase based on the geopolitics situation at the moment.
Well, from a fundamental perspective, it seems like there's an absolute glot of oil on Planet Earth. I mean, the supply side seems to be winning out here, Lorenzo. Do you see that differently?
I see that being a moment in time, And as we've said previously, as we look at the twenty seven twenty eight, we've got strong demand signals and actually twenty six will be a year where we trough and we see a recovery in the second half of the year going into twenty seven. You've already got early indications from what we're seeing from our customers in the Middle East in particular relative to rig activation and also the expectation
that that supply demand comes into balance. And I think again you've got to look at the fundamentals longer term and whereas there's maybe oversupply at the moment, you see that coming correction into twenty seven twenty eight, and the fundamentals with population increasing, energy demand increasing, AI, oil and gas is on the rise, and you're going to need more supply.
How is that balance right now, Lorenzo, specifically with the AI demand, is it yet outstripping the availability of these new projects to come online and power them, be it renewables or it be some parts of your business that might be used in order to power it.
So at the moment, I think there's a bifurcation again. You've got a good supply of oil. If you look at gas, gas is the winner longer term. And as you look at the fundamentals as well, we see gas growing significantly over the course of now and twenty forty, an increase in natural gas by twenty percent, and that's what's going to be fueling a lot of the data centers.
And also as we look at the energy demand being supplied by natural gas and the electrons being made by the gas turbines that we supply and others supply, and also the LNG that we're liquefying around the world and going to the various locations, So there's a good supply of base oil, and gas is the winner.
Talk to us about the data center demand. We all see the incredible capex being dolled out right now from the big hyperscalers. And you're a big player in this segment. How much of your business is this driving?
Again, we recently took up our estimate from a turbine perspse active to three billion of orders during twenty five to twenty seven. That's a doubling of what we previously saw. We just announced a nice win last week also with regards to providing gas turbans our Frame five to a data center operator, and again today announcing on the generator side. So if you look at spend twenty twenty five, about
five hundred billion we're spent on data centers. We see that increasing by twenty thirty to a trillion dollars, and it is very much a meeting the demand at the moment, and we are making sure we've got the right capacity in place and we're serving our customers appropriately.
Well, you're in DC right now, where there's been a big political focus on energy dominance for the United States, Lorenzo, to what degree has that talk been followed up with action. Is policy actually accelerating project approvals? Yet?
You know, we've seen this administration be very supportive and as we look at the events today also, we're celebrating the first cargo of LNG from the United States, and I think it's important to note that ten years ago we didn't have any LNG being exported, and today we're one of the largest producers and exporters of LNG around the world. And as you look at this administration definitely supportive of continuing to see deregulation, continuing to see faster permitting.
Is everything solved yet, No, but they're working towards that and continuing to be an energy supplier to the world for affordable, secure, sustainable energy.
Yes, I mean amazing how much we've managed to ship to Europe help them get off their dependence of Russian energy. How much further do you think we have to go there, Lorenzo, And how much is that being talked about in Washington.
The US is definitely a place that's abundant in natural gas, and as has been said by Mini, there's many decades ahead of plentiful supply, and so we've got several opportunities, incremental projects that are currently going through final investment decision. And as you look at the marketplace again, we see there needing to be an installed based capacity of LNG by twenty thirty five of nine hundred and fifty mtpa, and so there's a long runway here out into the next decade.
Lorenzo, thank you so much for joining us this morning, and joy the rest of your time in Washington, DC. Lorenzo Simonelli, CEO of Baker Hughes