Global energy investment is on course to reach a record $3.4 trillion in 2026 despite mounting geopolitical tensions, rising borrowing costs and growing pressure on energy infrastructure in the Middle East, according to the latest report by the International Energy Agency (IEA).
The agency said investment continues to shift decisively towards clean energy technologies, with renewables, nuclear power, electricity networks and electrification attracting the largest share of capital.
According to the report, about $2.2 trillion is expected to flow into clean energy technologies this year, compared with $1.2 trillion for fossil fuels.
Advanced economies and China are projected to account for more than 70 percent of total energy investment, while power sector projects will represent nearly half of global spending.
The IEA noted that although the conflict in the Middle East is likely to reinforce concerns around energy security and encourage fresh investment, most capital spending plans for 2026 had already been committed before the outbreak of hostilities.
Around 75 percent of this year’s investment decisions were locked in before the conflict escalated, limiting the ability of companies to rapidly adjust spending plans.
Oil investment falls for third consecutive year
The report showed that upstream oil investment is expected to decline for a third straight year, with supply-side oil spending projected at around $500 billion in 2026.
Despite oil prices remaining elevated, only a handful of producers have increased investment plans.
Among major international oil companies, ConocoPhillips was the only firm to raise its 2026 capital expenditure guidance, increasing spending by 2 percent to support additional drilling activity.
Meanwhile, investment in the US shale sector is still expected to decline by about 7 percent this year.
“A higher-for-longer price could boost spending on some short-cycle assets, notably US shale,” the IEA said.
The agency noted that smaller independent producers may have greater flexibility to respond to higher prices than major oil companies and state-owned producers.
Middle East conflict threatens energy infrastructure
The IEA warned that the ongoing conflict is beginning to take a toll on energy infrastructure across the Middle East.
Spending in the region is expected to decline by 1 percent this year as governments face mounting fiscal pressures and reconstruction costs.
The agency estimates that at least 30 energy facilities have already sustained damage during the conflict, with repair costs likely to run into tens of billions of dollars.
The report follows growing concerns that disruptions to production, refining and export infrastructure could tighten global energy markets further.
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