The Middle East conflict is forcing countries to rethink their energy strategies by opening new supply routes and refocusing on their own resources, to address the second energy crisis in the last five years, the International Energy Agency (IEA) said Thursday, AFP reports.
“We are going through the most serious energy security crisis the world has ever faced, and I believe this will reshape investment strategies globally, just as the great turmoil the energy sector went through after the oil shocks of the 1970s. We are already seeing an intensification of efforts by producing and consuming countries to diversify trade routes and energy sources, including by building new pipelines and other supply infrastructure, as well as by increasing the use of domestic resources,” said Fatih Birol, IEA executive director, in the report on global energy investment prepared by the IEA and the OECD.
The IEA estimates that global energy investment will reach $3.4 trillion in 2026, a slight increase from the previous year, of which about $2.2 trillion will be allocated to electricity grids, storage, low-emission fuels, nuclear power, renewable energy, energy efficiency and electrification, according to Agerpres.
In addition, about $1.2 trillion is to be invested in oil, natural gas and coal.
However, the IEA estimates that oil investment will decline for the third consecutive year in 2026, falling below $500 billion, despite rising crude prices. This is explained by uncertainty about the duration of these price increases, delays in project completion, supply constraints and a shrinking offshore platform market, which limits short-term investments outside the Middle East.
In contrast, investment in natural gas is expected to reach $330 billion, the highest level in a decade, supported by a wave of new liquefied gas export projects, especially in the United States and Qatar.
At the same time, oil-importing countries are turning to energy sources available within their own borders, especially renewables, nuclear power and coal.
The IEA estimates that investment in renewables should reach about $665 billion in 2026, of which $365 billion will be for photovoltaics alone.
Nuclear investment continues to recover and is expected to exceed $80 billion annually, while coal investment is expected to reach $180 billion, the highest level since 2012.
China will account for nearly 70 percent of global coal spending, and some Asian countries may seek to expand existing coal-fired power plants to strengthen their energy security.
Finally, investment in electricity supply and infrastructure is expected to reach nearly $1.6 trillion in 2026, of which about $550 billion is for grids, while investment in battery storage is expected to exceed $100 billion.
The International Energy Agency is the leading energy advisory body for the 29 most developed countries. The organization was established in response to the first oil shock of 1973–1974, to coordinate the release of oil from reserve stocks.