Why is global oil investment expected to decline for the third consecutive year despite rising oil prices?

According to the IEA report, oil investment is projected to decline for the third straight year in 2026 — falling below $500 billion — due to uncertainties about how long high oil prices will last, long project lead times, supply chain constraints, and tight availability of offshore drilling rigs, all of which limit investment outside the Middle East, even amid supply shocks from regional conflicts.

What factors are driving natural gas investment to a decade-high level, and how does it compare to oil investment trends?

Natural gas investment is set to reach $330 billion in 2026 — the highest in ten years — driven primarily by new liquefied natural gas (LNG) export projects in the United States and Qatar; this stands in sharp contrast to the continued decline in oil investment, reflecting a strategic shift toward more flexible, exportable gas infrastructure amid growing energy security concerns, including the de facto closure of the Strait of Hormuz.

IEA: Global Oil Investment Set for Third Consecutive Decline, Natural Gas Spending to Hit Decade High

May 29, 2026

The IEA reports global oil investment will fall for three consecutive years by 2026 due to supply constraints, while natural gas investment reaches a ten-year high of $330 billion amid shifting energy security strategies.

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