By Avi Salzman

The war in Iran and the enormous electricity needs of data centers are transforming the global energy system, often in surprising ways. Consumers in several countries are desperate to buy appliances and vehicles that can free them from fossil fuel dependence, while governments are looking to all sorts of old and new energy sources to protect their citizens -- that means more coal, nuclear and solar power in the future.

The International Energy Agency released a sweeping global energy investment report on Thursday that detailed the changes.

Here are five takeaways:

1. Early statistics show the war has spurred explosive demand for electric vehicles and other energy sources that don't use fossil fuels. Latin America's EV sales surged 75% in the first quarter year-over-year, while Asia's grew 80%. Europe's were up 30%. China's exports of solar equipment to Africa jumped 120%, and soared 150% to Southeast Asia. Sales of heat pumps in Europe rose 17%, despite countries having scaled back on incentives to buy them. And in India, which depends on liquefied petroleum gas for cooking, there's been a huge surge of interest in electric induction stoves. The IEA estimated that induction stove sales were 10 to 15 times higher in the first quarter of 2026 as compared with the first quarter of 2025.

2. Renewables aren't the only beneficiaries. Investments in coal supplies are on track to hit $180 billion this year, their highest level since 2012. China accounts for 70% of that spending, with India in second. It's not yet clear if the trend will spread elsewhere, but it's clearly helping boost global coal prices, which are up 31% this year.

3. The data center boom is fundamentally reshaping natural gas markets. Global orders for new natural gas-fired power plants jumped to a 25-year high of 130 gigawatts in 2025. The vast majority of the new plants are headed for the U.S. In fact, spending on new natural gas power plants designed to serve U.S. data centers is higher than spending on natural gas power plants in any other entire country. The data center boom is so enormous it may end up pulling demand away from one of America's fastest-growing industries -- liquefied natural gas exports. Given the demand for new natural gas plants from the U.S. and the Middle East, countries elsewhere that depend on imported natural gas for basic power have limited access to new natural gas equipment, the IEA says. That could hurt future LNG demand, and stocks of exporters like Venture Global and Cheniere Energy.

4. The war has caused severe damage to Middle Eastern energy infrastructure that will likely cost tens of billions of dollars to restore. More than 30 facilities have sustained damage, including refineries, petrochemical plants, and oil and gas production sites, the IEA says. Middle Eastern producers are already looking at new routes to get their products out of the region, so they can bypass the Strait of Hormuz. That should boost companies that build and service energy infrastructure like Saipem and SLB. Saudi Arabia and the United Arab Emirates have been better off than other countries, because they already have alternate pipelines. But all the upcoming spending within the Middle East could deprive other regions of energy investment, the IEA warns.

5. One beneficiary of the turmoil in the Middle East is Latin America, whose oil and gas production is growing fast. Brazil and Argentina are both expanding production, and Venezuela is now becoming a more realistic option for private producers. Still, increasing exports there will be extremely expensive. "In Venezuela, production is expected to begin recovering in the next couple of months, but restoring it to around 3 million barrels per day would require several hundred billion US dollars in cumulative investment over the next decade for greenfield developments and rehabilitation of critical infrastructure," the IEA said.

Write to Avi Salzman at avi.salzman@barrons.com

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May 28, 2026 13:49 ET (17:49 GMT)

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