Global investment in natural gas is all set to rise by over 10% in 2026 to USD 330 billion, its highest level in 10 years, while upstream oil spending declines for a third straight year, the International Energy Agency (IEA) said in a report.
The declining investment appetite comes at a time when the global energy markets remain disrupted by the Iran war, which has halted tanker traffic through the Strait of Hormuz, apart from causing production stoppages across the Middle East.
These developments have forced companies to accelerate investment in other geographies and boost 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.
The “World Energy Investment 2026” report predicts capital flows to the energy sector to grow 5% in 2026 to reach USD 3.4 trillion, despite Middle East disruptions.
“Expectations for investment across different fuels vary widely, with oil set for another subdued year. Natural gas and coal are poised for continued growth as the next major wave of LNG projects advances and energy security concerns in Asia drive renewed demand for coal,” the report said.
While USD 2.2 trillion will go to renewables, energy storage, power grids and low-emission fuels, less than USD 500 billion will be invested in oil supply. Total spending on fossil fuel supply in 2026 is expected to reach just over USD 1 trillion, returning to 2024 levels after the near 3% decline in 2025.
“Heightened concerns over energy security are expected to boost investment in domestic power supply, including renewables, nuclear and coal. This comes at a time when global investment in renewable electricity is flattening after several years of rapid growth, although renewables still account for more than 70% of total power generation spending, including USD 365 billion – USD 1 billion a day – for solar projects. At the same time, orders for new natural gas-fired power plants surged to 130 GW in 2025, a 25-year high, with US data centre demand a major driver,” the report added.
Natural gas’ investment growth will largely come from the United States-based projects. However, the current energy shock that arose from the Strait of Hormuz blockade has made Asian importers cautious on gas dependence.
“Coal investments will reach a 14-year high, hitting USD 180 billion, driven by China and India. “Nuclear is making a comeback with USD 80 billion in spending this year,” IEA remarked.
The gloom will be upon the Middle East, as oil and gas investments are expected to fall 1% in 2026. Damage from the Iranian missile and drone attacks; lower revenue; and production stoppages, in the IEA’s opinion, are reducing the region’s 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.