Global energy investment is projected to reach $3.4tn in 2026, as geopolitical tensions and disruption in the Strait of Hormuz reshape capital allocation priorities. Moreover, governments and companies are increasingly prioritising energy security, diversification, and resilient supply chains.
According to the latest outlook, around $2.2tn will flow into grids, storage, low-emissions fuels, nuclear, renewables, efficiency, and electrification. Meanwhile, approximately $1.2tn will be directed toward oil, natural gas, and coal. Additionally, the shift reflects a structural rebalancing of long-term energy strategies.
The conflict in the Middle East and disruption to key shipping routes have altered global risk perceptions. As a result, investment decisions are increasingly focused on domestic supply sources and alternative trade corridors.
Oil Weakens While Gas and Power Expand
Despite elevated prices, oil investment is expected to decline for a third consecutive year in 2026, falling below $500bn. However, uncertainty over price duration, supply chain constraints, and long project lead times continues to limit new spending responses outside major producing regions.
At the same time, natural gas investment is projected to rise to $330bn, the highest level in a decade. Moreover, this increase is supported by a wave of LNG export projects, particularly in the United States and Qatar. Additionally, investors are responding to heightened demand for flexible transition fuels.
Renewable investment is expected to reach around $665bn, including approximately $365bn in solar. However, while growth has moderated after several strong years, low-emissions sources still account for more than 70% of global power generation investment. Meanwhile, nuclear investment continues to strengthen, exceeding $80bn annually with capacity expansion underway across multiple countries.
Electricity Systems and Geopolitical Risks Drive Strategy Shift
Electricity infrastructure remains the central theme in global energy spending. Therefore, total investment in electricity supply and infrastructure is expected to reach nearly $1.6tn in 2026 and rise to $2tn when end-use electrification is included.
Spending on grids is projected to approach $550bn, up nearly 20% year-on-year. Additionally, battery storage investment is expected to exceed $100bn as systems adapt to rising renewable penetration and grid volatility.
Artificial intelligence and data centres are also reshaping electricity demand, particularly in the United States. Consequently, orders for gas-fired power plants have reached a 25-year high, reflecting rising structural demand. However, supply chain constraints and turbine shortages are limiting deployment in other regions.
Finally, financial volatility linked to geopolitical tensions is tightening financing conditions. As a result, emerging and developing economies face higher borrowing costs, which may slow future energy project development despite strong long-term demand.
