Gas investment surges as oil spending declines globally

Precious Anga

Lagos — Global energy investment is undergoing a clear shift, with natural gas spending set to hit a 10-year high in 2026, even as upstream oil investment continues to decline for the third consecutive year, according to the International Energy Agency (IEA).

The IEA reports that global investment in natural gas projects will rise by more than 10 percent to about $330 billion in 2026, reflecting strong momentum in LNG developments and supply diversification efforts across key producing regions. The increase comes amid ongoing disruptions in global energy markets, including geopolitical tensions in the Middle East that have tightened supply routes and reshaped investment decisions.

At the same time, oil is losing ground in capital allocation. Investment in upstream oil projects is projected to fall below $500 billion, marking a sustained slowdown as companies shift focus away from long-cycle crude developments and toward gas, power infrastructure, and cleaner energy assets.

Overall, global energy investment is still expected to grow, reaching about $3.4 trillion in 2026, driven largely by spending in renewables, power grids, storage systems, and low-emission fuels. The IEA estimates that around $2.2 trillion will flow into clean energy-related technologies, underscoring the ongoing structural transformation of the global energy system.

Natural gas remains the most dynamic fossil fuel segment, with growth largely anchored in U.S.-led LNG expansion projects. However, the current geopolitical uncertainty has made major Asian importers more cautious, pushing them to reassess long-term dependence on external gas supplies.

Coal investment is also staging an unexpected rebound, climbing to a 14-year high of $180 billion, driven primarily by demand growth in China and India, where energy security concerns continue to influence fuel choices. In contrast, nuclear energy is experiencing renewed interest, with investment rising to around $80 billion as countries look for stable baseload power sources.

The Middle East remains a key pressure point in the global investment landscape. Oil and gas investment in the region is expected to decline slightly in 2026 due to disruptions, revenue constraints, and project delays linked to ongoing instability and restricted shipping routes.

However, capital is not disappearing it is shifting. Investment in Africa, Central and South America is projected to rise by more than 10 percent, as developers move into regions perceived as offering longer-term stability and untapped resource potential.

Despite these shifts, investors remain cautious about fully abandoning traditional oil-producing regions, reflecting uncertainty over how long current disruptions will last and how global supply chains will eventually stabilise.