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(Reuters) – Global investment in natural gas projects is set to rise by more than 10% this year to $330 billion, its highest level in 10 years, while upstream oil spending declines for a third straight year, the International Energy Agency said in a report.
As global energy markets remain disrupted by the Iran war, which has halted tanker traffic through the Strait of Hormuz and caused production stoppages across the Middle East, companies are accelerating investment in other geographies and boosting spending on renewables, LNG and coal to shore up supply security.
“We are already seeing intensified efforts by both producer and consumer countries to diversify trade routes and energy sources,” IEA Director Fatih Birol said in a statement.
The IEA’s World Energy Investment 2026 report says:
- Capital flows to energy sector will grow 5% in 2026 to reach $3.4 trillion, despite Middle East disruptions.
- $2.2 trillion will go to renewables, energy storage, power grids and low-emission fuels.
- Less than $500 billion will be invested in oil supply.
- Natural gas growth largely from U.S. LNG projects, but current crisis has made Asian importers cautious on gas dependence.
- Coal investments will reach a 14-year high, hitting $180 billion, driven by China and India.
- Nuclear making a comeback with $80 billion in spending this year.
PIVOT AWAY FROM MIDDLE EAST?
- Middle East oil and gas investment expected to fall 1% in 2026.
- Damage, lower revenue and production stoppages are reducing ability to deploy capital.
- By contrast, upstream investment in Africa, Central and South America will jump more than 10% in 2026 as ongoing projects gain momentum.
- Investors hesitant to fully pivot away, due to uncertainty over length of Middle East disruptions.
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