Energy security concerns reshape global investment priorities: IEA
Around US$2.2 trillion is expected to go to grids, storage, low-emissions fuels, nuclear, renewables, efficiency and electrification in 2026. (Image source: Adobe Stock)
Global energy investment is projected to reach US$3.4tn in 2026 as countries continue to strengthen electricity systems, expand clean energy deployment and invest in more resilient energy infrastructure, according to the International Energy Agency's (IEA) World Energy Investment 2026 report
The report forecasts that around US$2.2tn will be directed towards grids, energy storage, low-emissions fuels, nuclear power, renewables, efficiency measures and electrification this year. Investment in oil, natural gas and coal is expected to total approximately US$1.2tn.
Electricity-related spending remains the dominant theme in global energy markets. Investment in electricity supply and infrastructure is set to reach nearly US$1.6tn in 2026, rising to almost US$2tn when end-use electrification is included. Spending on electricity grids is expected to approach US$550bn, while battery storage investment is projected to exceed US$100bn.
Renewable energy continues to attract significant capital, with investment in renewable power projects expected to reach US$665bn, including US$365bn for solar energy alone. Nuclear energy is also gaining momentum, with annual investment exceeding US$80bn and close to 80GW of new nuclear capacity currently under construction across 15 countries.
However, the report notes that energy security has become an increasingly important factor in investment decisions following the latest disruption to global energy markets.
The ongoing conflict in the Middle East and the effective closure of the Strait of Hormuz have triggered fresh concerns over the reliability of energy supplies and international trade routes. According to the IEA, the resulting supply shock is prompting governments and companies to reassess risk and accelerate diversification strategies.
The impact has been particularly pronounced in Asia and the Middle East, where disruptions to shipping flows through the Strait of Hormuz have affected energy markets and reinforced the need for alternative supply routes and domestically available energy resources.
"We are in the midst of the largest energy security crisis the world has ever faced – and I believe this will reshape investment strategies globally, with parallels to the major changes the energy world witnessed after the oil shocks of the 1970s," said IEA executive director Fatih Birol.
"We are already seeing intensified efforts by both producer and consumer countries to diversify trade routes and energy sources – such as advancing new pipelines and other supply infrastructure, on the one hand, and turning more to domestically available resources, on the other. These range from renewables and nuclear to coal, oil and gas, in some cases – as well as broader measures to strengthen electricity systems, expand electrification and accelerate energy efficiency."
While oil prices remain elevated, upstream oil investment is expected to decline for a third consecutive year, falling below US$500bn. The report attributes this to uncertainty over the duration of the price spike, long project lead times, supply chain constraints and tighter offshore rig markets.
Natural gas investment, meanwhile, is forecast to reach US$330bn, the highest level in a decade, supported by new LNG export developments, particularly in the United States and Qatar.
The report also points to rising investment in energy efficiency, with approximately US$350bn being invested globally each year. More than 20 countries have already announced new efficiency policies in response to the current crisis.
At the same time, increased market volatility linked to the Middle East conflict is raising financing costs and slowing investment decisions in some regions. The IEA warns that higher financing costs could disproportionately affect capital-intensive energy projects, particularly in emerging and developing economies.
As governments and industry respond to another major energy shock, the report suggests that diversification, electrification and stronger energy security measures will remain central to investment decisions in the years ahead.
Read the full World Energy Investment 2026 report for a comprehensive analysis of global and regional energy investment trends here