How Did the Management of the Strait of Hormuz Push the World Back Toward the Coal Era?
Sea News-The latest report from the International Energy Agency (IEA) suggests that the strategic management of the Strait of Hormuz and disruptions in one of the world’s most critical energy arteries have reshaped global energy investment patterns, prompting countries to redefine their energy security strategies.
According to the IEA’s World Energy Investment 2026 report, total global energy investment is projected to reach approximately $3.4 trillion next year. A significant portion of this spending is being driven by concerns over the security of traditional energy trade routes and fears of renewed geopolitical shocks.
The agency noted that the effective closure of the Strait of Hormuz has had the greatest impact on Asian countries and energy-importing economies, forcing governments and major corporations to seek greater diversification of both energy sources and transportation routes in order to reduce dependence on vulnerable maritime chokepoints.
Fatih Birol, Executive Director of the IEA, described the current situation as “the largest energy security crisis in world history,” warning that the global energy system has entered a period comparable to the oil shocks of the 1970s—a turning point that reshaped energy markets for decades.
According to Birol, both energy-producing and energy-consuming nations are accelerating investments in new pipelines, transmission infrastructure, strategic reserves, and domestic energy resources, including renewables, nuclear power, oil, natural gas, and even coal.
The IEA forecasts that around $2.2 trillion of global energy investment in 2026 will be directed toward electricity networks, energy storage, low-carbon fuels, nuclear power, and renewable energy. By comparison, investment in oil, natural gas, and coal is expected to total approximately $1.2 trillion.
Meanwhile, investment in the oil sector is set to decline for a third consecutive year. Despite higher oil prices, spending is projected to fall below $500 billion as uncertainty over future demand, lengthy project timelines, and supply-chain constraints continue to weigh on the industry.
Natural gas, however, is experiencing a different trend. Global investment in the sector is expected to reach $330 billion, the highest level in a decade. Much of this growth is being driven by LNG export projects in the United States and Qatar.
Investment in renewable energy is projected to rise to around $665 billion, including $365 billion dedicated to solar power alone. Low-carbon energy sources are expected to account for more than 70 percent of global investment in electricity generation.
The report also highlights a renewed surge in coal investment, underscoring how many countries continue to prioritize energy security over climate objectives during periods of crisis. Investment in coal is forecast to reach $180 billion, its highest level since 2012, with China accounting for roughly 70 percent of the total.
The IEA warned that several Asian economies affected by the recent crisis may keep coal-fired power plants operating for longer than previously planned in order to avoid potential energy shortages.
Electricity infrastructure remains the largest area of global energy spending. Investment in power generation, transmission, and distribution infrastructure is expected to reach approximately $1.6 trillion in 2026. Spending on electricity grids alone is projected to increase by nearly 20 percent to around $550 billion, while investment in battery storage is expected to surpass $100 billion.
The report also identifies growing electricity demand from data centers and artificial intelligence applications as a major factor reshaping global energy investment trends. In the United States in particular, this surge in demand has contributed to a sharp increase in orders for new natural gas-fired power plants.
The IEA concludes that the Strait of Hormuz crisis has become a defining catalyst for a global reassessment of energy security priorities, accelerating investments across both conventional and alternative energy sectors while highlighting the continuing tension between energy security and climate ambitions.
