Paris: In its secondary report on global energy investments released today, the IEA said spending on oil projects is projected to fall below $500 billion this year despite rising crude prices. The agency linked the decline to the ongoing supply shock triggered by the US-Israeli war on Iran and the continued challenges in securing alternative trade routes for energy supplies.

According to Bloomberg News Agency, global oil markets have remained volatile since the outbreak of the conflict on February 28, affecting maritime traffic through a key international waterway that carries nearly one-fifth of the world’s seaborne crude oil.

The disruption has resulted in supply shortages and higher oil prices across several regions, prompting countries and energy companies to reassess their investment strategies and long-term energy security plans.

While oil sector investments continue to weaken, the IEA noted that total global energy investments are still expected to rise slightly this year to $3.4 trillion. A significant portion of that spending is set to flow into electricity grids, energy storage systems, low-emission fuels, renewable energy, nuclear power, and electric transport infrastructure.

The agency also forecast strong growth in natural gas investments, with spending on gas projects worldwide expected to reach $330 billion in 2026, the highest level recorded in a decade.

The increase is being driven by a surge in new liquefied natural gas (LNG) export projects, particularly in the United States and Qatar.