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Global Energy Markets Face New Volatility as Geopolitical Risks Mount, RBC Says

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Global energy markets face renewed uncertainty as escalating Middle East tensions, disruptions to Russian energy infrastructure and efforts to secure alternative supplies reshape outlooks for oil, gas and renewable energy, analysts at RBC Capital Markets said in a Thursday note.

The strategists said the latest developments reinforced their view that a near-term diplomatic breakthrough was unlikely to restore normal shipping activity through the Strait of Hormuz and the Red Sea, two critical energy trade routes.

Recent days have brought renewed attacks on Iranian Revolutionary Guard Corps targets, as well as US-Saudi strikes against Iran-backed militia facilities in Iraq.

RBC highlighted Saudi Arabia's involvement as a sign that the conflict is expanding. Riyadh has accused Iran-backed Popular Mobilization Forces militias in Iraq of carrying out recent drone attacks on energy facilities in eastern Saudi Arabia.

The strikes have triggered political backlash in Iraq, where the PMF is part of the official security forces.

Iraqi officials condemned the attacks as violations of national sovereignty.

RBC warned that renewed instability could further delay Iraq's recovery, with the country's oil production still about 2 million barrels per day below early 2026 levels.

The analysts also pointed to continued disruptions in Russia's energy sector. Ukrainian drone strikes have hit several Russian refineries, including facilities in Ryazan, Perm and Tyumen.

RBC estimates over 3 million b/d of Russian refining capacity remains offline. Russia has extended fuel export restrictions, while disruptions at the Novorossiysk port have raised concerns about Black Sea crude shipments.

Meanwhile, rising energy security concerns are accelerating demand for Chinese clean-energy technology. Imports of Chinese solar products surged in Africa and Asia in the first half of 2026, as countries sought to reduce exposure to volatile fossil fuel markets.

RBC said the conflict has pushed nations including the Philippines, Vietnam and Indonesia to speed up renewable energy deployment, making energy security a key driver of the global clean-energy transition.

Separately, RBC analysts said new US pipeline capacity has eased pressure on natural gas prices in the Permian Basin.

A project adding 570 million cubic feet per day of capacity helped reduce extreme price declines at the Waha hub, where gas prices had turned negative for a record period.

RBC said additional projects could add more than 13 Bcf/d of capacity by 2030, though supply constraints remain a risk.

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