2 Predictions for Energy Markets in 2026 as the Global Oil Reserve Draws Down

The geopolitical conflict in the Middle East has limited the world's access to key oil and natural gas supplies. These fuels are commodities, so supply constraints have driven up energy prices. That's pretty normal, but there are still likely to be lingering impacts from this specific supply/demand shock. Here are two long-term impacts to consider as 2026 moves along, and ways to invest in them.

1. Energy security will become increasingly important

The United States is one of the world's largest producers of oil and natural gas, so it has plenty of these vital fuels to go around. The real pain point for U.S. citizens is price, since oil and natural gas are commodities. Many countries aren't as lucky, as they rely on other countries to supply them with the energy they need. The fact that the Strait of Hormuz has been shut down is a wake-up call.

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Countries, including the United States, are likely to start thinking more strategically about their energy sources. The end result could be a realignment of supply relationships, perhaps with the United States and Canada becoming even more important players on the global stage. The big winners could be midstream businesses like Enbridge (NYSE: ENB), Enterprise Products Partners (NYSE: EPD), and Energy Transfer (NYSE: ET), all of which help to move oil and natural gas around the world.

2. Clean energy will become even more important

Oil and natural gas will remain important energy sources for decades to come. However, the ongoing shift toward cleaner energy options could see renewed interest because of the current supply shock. If it generates power with solar and wind, a country's reliance on oil and natural gas may be less of an issue. That's even true for consumers, who may choose to shift from combustion engine vehicles to electric cars. Notably, used EV sales have recently started to rise.

There are multiple ways to play this long-term trend, but one of the best is likely to be NextEra Energy (NYSE: NEE). The company operates a large regulated electric utility in Florida, and it is also one of the world's largest producers of solar and wind power. If you prefer to jump into clean energy with both feet, you should probably look at Brookfield Renewable Partners (NYSE: BEP), which owns a geographically diversified portfolio of clean energy assets, including hydroelectric, solar, wind, battery storage, and nuclear power. It's a one-stop shop for the clean energy transition.

The same, but different

When it comes to energy prices, nothing unusual is happening because of the conflict in the Middle East. Oil and gas prices have always risen and fallen over time. However, the nature of this conflict is likely to lead countries to rethink their energy needs and how they get met.

Working with politically and economically stable countries, like the United States, is likely to become more important. And the shift toward clean energy, which can be produced within a country's own borders, is also likely to see renewed enthusiasm.

Reuben Gregg Brewer has positions in Brookfield Renewable Partners and Enbridge. The Motley Fool has positions in and recommends Enbridge and NextEra Energy. The Motley Fool recommends Brookfield Renewable Partners and Enterprise Products Partners. The Motley Fool has a disclosure policy.