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Next year may prove a turning point for the oilfield services sector, Baker Hughes says.

A further reduction in idled Opec supplies as well as more constructive supply and demand balances will be needed for that to take place.

“That inflection is likely a 2027 catalyst for the sector, and may mark the beginning of an upcycle,” chief executive officer Lorenzo Simonelli told analysts on a conference call Monday.

As a result, the company anticipates global upstream spending will see “low single digit declines” this year. Meanwhile, oil and gas spending is expected to decline at a “mid-single digit rate” in North America as producers maintain capital discipline and preserve inventory.

Baker Hughes said improved orders at its business that houses power systems and LNG helped more than offset continued “macro-driven softness” in oilfield services.

The company’s industrial & energy technology (IET) business reported strong fourth-quarter bookings of $4bn, contributing to a record $14.9bn for full-year 2025 and surpassing the high end of guidance.

“We expect IET orders to remain at robust levels, supported by continued momentum in LNG, a strong year of FPSO (floating production, storage and offloading ) and gas infrastructure awards and sustained strength for power systems,” Simonelli said after posting fourth-quarter results.

The company expects to book about $3bn of data center-related orders between 2025 and 2027.

Profit fell to $876mn in the fourth quarter from $1.2bn in the same quarter of 2024. Revenue held steady at $7.4bn.

By Stephen Cunningham