How the Iran War and AI Boom Are Creating an Unprecedented Gas Turbine Supercycle

The war added a powerful new dimension. With global supply chains in disarray, countries moved quickly to reduce reliance on imported energy and began scrambling to build domestic gas-fired power generation. Siemens Energy’s own Capital Market Day presentation had already identified "reconstruction" needs in countries like Iraq, Ukraine, and Syria—totaling up to 60 GW—as a future demand driver. The Iran conflict has dramatically accelerated this timeline and added further geopolitical urgency . By Q2 2026, the company's order backlog had swelled to €146 billion .

The Global Manufacturing Bottleneck

This demand surge is smashing into a wall of production constraints. The world’s three largest gas turbine manufacturers—Siemens Energy, GE Vernova, and Mitsubishi Heavy Industries—are facing extensive production backlogs. A 2025 IEEFA report found that project developers are being advised to plan seven to eight years ahead for turbine procurement, and manufacturing capacity expansions are unlikely to resolve the shortage in the medium term .

In the U.S., the planned or ongoing gas-fired power capacity has surged to 252 GW, more than tripling previous figures, with the majority of new capacity intended to serve data centers . Turbine manufacturers are struggling to increase output, and over two-thirds of announced AI projects do not yet have a gas turbine manufacturer under contract . Power developers are adapting by securing turbine reservations years in advance, but the lead times for new orders now stretch far beyond what project timelines typically allow.

Reshaping Global Energy Markets

Beyond the factory floor, the Iran war has fundamentally destabilized energy markets. The IEA has labeled the disruption the "largest supply disruption in the history of the global oil market," with over 500 million barrels of crude and condensate knocked out of circulation and supply shortfalls estimated at approximately 20 million barrels per day .

European natural gas prices spiked immediately after hostilities began, and U.S. fuel prices surged above $4 per gallon . The conflict has been particularly destabilizing for natural gas, as the global supply chain has fewer rerouting options and less storage capacity than for oil, making the impact more acute for consumers . According to the U.S. Energy Information Administration, industrial natural gas demand in the U.S. is expected to stay at record levels through at least 2027, further tightening an already strained market .

The long-anticipated glut in liquefied natural gas (LNG) that was expected to stabilize prices has been pushed back by years, even as new export capacity comes online . For Siemens Energy, this sustained volatility translates directly into a long-term demand signal. As long as nations perceive energy dependency as a national security risk, the order books for gas turbine manufacturers will remain full.