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Energy Security Concerns From Iran War to Potentially Drive Future Investment Diversification, Expert Says

発信

-- Concerns over energy security triggered by the ongoing Iran-linked disruption in the Strait of Hormuz could prompt investors to consider shifting oil and gas investments to other regions, but as an industry expert cautions, it may be too early to declare a lasting structural change.

The market reaction so far to the worst energy crisis in over 80 years reflects uncertainty rather than a definitive long-term shift away from the Middle East, said Argus Media Chief Economist David Fyfe in an interview withon Monday.

Despite what he described as the most severe energy shock since World War II, market reaction has largely remained muted because, prior to the crisis, there had been a broad consensus that 2026 would be a year of global supply surplus.

While crude prices have surged in the short term due to constrained flows through the strait, the longer-term outlook depends heavily on how quickly normal shipping resumes, Fyfe said.

Argus' base-case assumption currently models a three-month disruption, with a potential resolution by late May. However, even in that scenario, the normalization of oil and gas flows could take until August or September.

"There is a temptation to view this as the new normal," Fyfe noted, but emphasized that it is premature to conclude that Middle Eastern oil will carry a permanent risk premium.

The Middle East remains central to global energy supply, holding the largest reserves and the bulk of the world's spare production capacity, the economist added.

The region's long-term role as the marginal supplier of crude has not fundamentally changed, at least not yet, even though that capacity is currently inaccessible due to logistical and geopolitical constraints.

However, market signals are beginning to shift, he said.

Long-dated crude futures, such as Brent, have risen from around $65 per barrel previously to higher levels, indicating that traders are factoring in prolonged uncertainty.

This shift in the forward curve is critical, as sustained higher price expectations tend to drive upstream investment decisions. If disruptions persist, the analyst said, capital is likely to flow into alternative supply regions, particularly in the Western Hemisphere.

Countries such as Brazil, Argentina, Guyana, and Canada are well-positioned to attract investment due to relatively favorable regulatory frameworks and resource potential.

Venezuela could also emerge as a longer-term contributor, particularly following recent policy shifts by the US.

However, the analyst cautioned that any increase in Venezuelan production would likely be slow and capital-intensive, given that its oil sector has suffered decades of underinvestment.

Access to financing will be another key factor shaping investment flows.

Fyfe stressed that broader investment conditions, including fiscal regimes and regulatory stability, will ultimately determine the pace of development.

In the near term, uncertainty continues to weigh on investment decisions.

For instance, US shale producers have not significantly increased drilling plans for 2026, reflecting doubts about how long elevated prices will last.

Fyfe suggested that prices would likely need to remain above $75 to $80 per barrel for at least six months before triggering meaningful increases in short-cycle investments, particularly in onshore US fields.

While the current working assumption remains a relatively short-lived crisis, the situation's severity could leave a lasting imprint on global energy markets.

Even if flows resume in the coming months, the episode may accelerate diversification of supply and investment into new regions, especially across the Americas as buyers and investors seek to hedge against future geopolitical risks, Fyfe said.

In the biofuels sector, Fyfe said, "At the moment, certainly in Europe, diesel prices have increased very dramatically. Renewable diesel is looking a rather more attractive prospect, to an extent."

He added that if refined fuel prices remain elevated, it could support greater investment in alternatives such as ethanol and biodiesel. Improving biofuel economics could also catalyze a regional shift in capital investment, particularly as Brazil and the US dominate the soybean export market, a key biofuel feedstock.

However, the chief economist said that disruptions in the Strait of Hormuz were not limited to petroleum, but also impacted fertilizers and other raw materials, likely pushing crop-growing costs higher.

This could act as a headwind for the biofuels sector, even as biodiesel becomes more competitive with refinery-produced diesel.

"Biofuels are looking a little bit more attractive than refined petroleum products in markets in Europe and in Asia," he said.

On the near-term outlook, Fyfe said that if flows through the Strait of Hormuz recover, the relative advantage for biofuels is likely to dissipate.

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