Amid the conflict in the Middle East, countries and companies are rethinking their energy investment strategies in response to heightened concerns over energy security and the reliability of global trade flows, says the International Energy Agency in the newly published 2026 edition of its flagship publication World Energy Investment.
The report highlights how the current energy crisis is changing risk perceptions and bolstering moves towards greater diversification. Coming just a few years after the energy crisis centred around Russia’s invasion of Ukraine in 2022, today’s supply situation is expected to leave a lasting imprint on future investment priorities – particularly in Asia and the Middle East, where the impacts of the disruptions to shipping flows through the Strait of Hormuz have been felt most acutely.
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The report projects that global energy investment will reach $3.4trn in 2026, a slight increase year-on-year. Around $2.2trn is expected to go towards grids, storage, low-emissions fuels, nuclear, renewables, efficiency and electrification in 2026, while around $1.2trn is set to be invested in oil, natural gas and coal.
Despite higher oil prices, oil investment is expected to decline for a third consecutive year in 2026. The report finds that uncertainty over the duration of the price spike, long project lead times, supply chain constraints and tighter offshore rig markets are limiting near-term spending responses outside the Middle East. At the same time, natural gas investment is projected to rise to the highest level in a decade, supported by a wave of new liquid natural gas export projects, particularly in the US and Qatar.
The report highlights growing interest among fuel-importing countries in energy sources available domestically including renewables, nuclear power and, in some cases, coal. Investment in renewable power projects is expected to total around $665bn in 2026, with $365bn going toward solar alone.
Investment prospects
While annual investment growth in renewables has moderated following several years of rapid expansion, low-emissions sources still account for more than 70% of total power generation investment globally. Nuclear investment is continuing its resurgence, exceeding $80bn annually, with close to 80 gigawatts of new nuclear capacity under construction across 15 countries.
Coal investment, meanwhile, is set to rise to $180bn in 2026, the highest level since 2012, with China accounting for almost 70% of global coal supply spending. The report notes that some Asian countries affected by the current crisis may seek to keep existing coal-fired power plants operating for longer to bolster energy security.
At the same time, the Middle East conflict is complicating the prospects for financing future energy projects. The conflict has triggered volatility within financial markets, slowing investment decisions in the short term and pushing up long-term financing costs. This could disproportionately affect capital-intensive energy technologies.
Electricity-related investment remains the dominant theme in global energy spending trends. Investment in electricity supply and infrastructure is expected to reach nearly $1.6trn in 2026 and rise to $2trn when end-use electrification is included. Spending on electricity grids is projected to approach $550bn, up nearly 20% year-on-year, while battery storage investment is set to exceed $100bn.
The electricity demands of the rapid expansion of data centres and AI are also becoming a major influence on energy investment trends in some markets, particularly in the US. Orders for new gas-fired power plants reached a 25-year high in 2025, with data centre needs playing a significant role.
