Energy addition, AI power demand and security are driving a global race for capital

Overview

This cross-asset Barclays report frames global energy as a structural growth and investment cycle. Its central conclusion is that AI, electrification, emerging-market development and energy security are increasing demand faster than supply, grids and infrastructure can respond, requiring sustained capital across hydrocarbons, renewables, power networks, storage and enabling equipment.

Core views

Barclays' central argument is that the transition is an era of energy addition rather than substitution. In 2025, oil, natural gas, coal, solar, wind and nuclear all reached new highs, while clean-energy investment reached $2.3tn versus $1tn for fossil fuels. Yet demand growth of 1.3% still required additional fossil fuels because low-emissions sources supplied nearly 60% of the increase, not all of it. Global upstream capex remains roughly 45% below peak levels, while clean investment has not yet delivered the grid, storage and firm capacity needed to replace the existing system. The report forecasts global energy use rising at a 1.9% CAGR from 2025 to 2050 and estimates annual energy investment of about $3.6tn in 2027, growing more than 5% annually. Electrification and AI are the most important incremental electricity-demand drivers. Global electricity demand is forecast to grow 3.7% in 2026, more than twice total energy-demand growth. Data-centre power use is forecast at 565TWh in 2026, up 26% from 447TWh in 2025, and could reach 945TWh by 2030. Barclays expects installed data-centre capacity to grow more than 30% annually in 2026-27 before moderating, with US installed IT capacity rising from 34GW in 2025 to more than 110GW by 2029. Its longer-term model estimates more than 600GW of data-centre capacity and about 32 quad Btu of energy demand by 2040. This raises demand for gas, firm power, networks, storage and distributed generation because interconnection queues and equipment lead times constrain conventional grid supply. Energy security changes the investment calculus from lowest cost to resilience. The report argues that geopolitical fragmentation makes countries more willing to pay for redundancy through storage, pipelines, LNG terminals, refining capacity, domestic production and diversified suppliers. Refinery disruption and underinvestment are cited as evidence: global refinery output was estimated to be down 4.5mb/d in Q2 2026, while the US 3-2-1 crack spread reached $64/b and global refining margins $59/b. Barclays also highlights more than 2,500GW of renewable, storage and large-load projects stalled in grid-connection queues. The resulting supply constraints, permitting delays and longer-duration demand drivers support its view of higher commodity volatility and upside inflation risk. For oil, Barclays sees resilient demand and deteriorating supply cushions. It forecasts global oil-demand growth of about 1.1mb/d annually from 2027 to 2030, reaching roughly 110.6mb/d in 2030, and estimates a 2030 mid-cycle Brent equilibrium of $85/b versus a $70/b forward-implied average at the time of writing. The report uses falling reserves-to-production ratios as an indicator of constrained productive capacity: the US ratio fell to 9.5 years in 2024 from 11 in 2022 and 14 in 2012. It argues that mature US shale, rising decline rates, limited inventories and geopolitical disruption increase the scarcity value of secure production, LNG and refining assets, though upstream operators remain capital-disciplined rather than pursuing indiscriminate growth. The transition remains a large and durable capital cycle, but Barclays stresses that the bottleneck has shifted from clean-generation deployment to system integration. Total energy investment is expected to reach $3.4tn in 2026, with almost two-thirds directed to clean technologies and infrastructure. However, grid investment of roughly $400bn in 2024 lagged about $1tn invested in generation assets. Barclays therefore favours transmission, distribution, transformers, storage, grid software, flexible and firm capacity, while cautioning that strategic relevance alone does not assure returns for commoditised clean-tech manufacturing. Nuclear, geothermal, hydro and long-duration storage are presented as complements to variable renewables; gas remains important for reliability and flexibility. The report identifies broad opportunities across energy services, integrated oil and gas, LNG, midstream, refining, utilities and selected clean technology. Energy services benefit from rising upstream, offshore, Middle East, geothermal and distributed-power activity; Barclays forecasts global upstream spending growth of 9% in 2027 and 10% in 2028. It estimates a US power gap of about 50GW by 2028, making speed-to-power and behind-the-meter solutions important. In utilities, data-centre demand increases the value of generation, existing grid connections, flexible assets and regulated network investment, but also raises funding and affordability pressures. Barclays notes European utilities raised more than €40bn of equity over the past three years to fund investment. The report is selective rather than uniformly positive. In US equity strategy, Barclays is more constructive on Utilities, Industrials and Tech beneficiaries of transmission, generation, grid modernisation and power management than on a broad Energy allocation. It remains Market Weight on integrated energy in Europe while favouring Oil Services and Utilities. Credit strategy also warns that large debt-funded capex cycles can pressure spreads: historically, sectors in the highest debt-growth quintile widened nearly 20bp over the following year. The report nevertheless sees supportive fundamentals, disciplined capex and government backing as offsets for selected energy and utility credits.

Analysis framework

Barclays starts with a global supply-demand and energy-security framework, then applies a proprietary energy model based on the EIA reference scenario adjusted for its data-centre and EV assumptions. It tests the implications across commodities, inflation, FX, transition finance, equity sectors and credit markets, and then identifies preferred and cautious exposures based on asset quality, contract visibility, balance-sheet capacity, valuation and execution risk.

Methodology notes

• Industry AnalysisSupply-demand framework

  Global energy supply-demand analysis

  The report compares structural demand from growth, electrification, AI and security with constrained supply, infrastructure and capital investment to explain tighter markets and investment needs.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Energy value-chain transmission

  Barclays traces how demand and security priorities affect upstream production, LNG, pipelines, refining, grids, utilities, storage and equipment providers.

• Valuation methodsP/E and PEG Valuation

  Forward P/E valuation for energy services

  The report values the sector using forward earnings multiples and argues that longer backlogs and greater confidence in cycle duration can move the earnings horizon investors capitalise.

• Quantitative, Factor, and Portfolio TheoryBeta/alpha analysis

  Regression-based commodity and terms-of-trade sensitivities

  The report uses estimated relationships between oil prices and the dollar, and between commodity prices and national terms of trade, to illustrate macro transmission.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Solaris Energy Infrastructure (SEI)

  Preferred distributed-power beneficiary of hyperscaler demand

  Strengths

  More than 2GW signed under long-term contracts; Barclays cites a 600MW recent contract and positions the company for speed-to-power demand.

  Weaknesses

  Capital expenditure burden is reflected in the valuation approach.

  Comparison

  Barclays views it as particularly well positioned among distributed-power providers.

  Risks

  Execution of fleet build-out and sustained distributed-power demand.

• Halliburton (HAL)

  Preferred energy-services exposure to North American activity and distributed power

  Strengths

  Barclays cites its short-cycle North American leverage, 20% VoltaGrid stake and power partnership.

  Weaknesses

  Core business remains cyclical.

  Comparison

  Barclays sees more tangible power optionality than peers.

  Risks

  Oil-price volatility and weaker upstream spending.

• Energy Transfer (ET)

  Preferred midstream exposure to gas pipelines, Permian liquids and exports

  Strengths

  Diversified, connected assets with demand-pull gas exposure and export infrastructure.

  Comparison

  Barclays sees better positioning than PAA for the preferred export-growth themes.

  Risks

  Commercialisation and project-FID execution.

• Shell

  Preferred integrated-energy exposure to LNG and energy security

  Strengths

  Largest LNG trader; LNG expected to represent about 60% of group production by 2030; management targets 10% annual FCF/share growth through the decade.

  Comparison

  Described as one of the clearest energy-security and LNG beneficiaries.

  Risks

  Commodity-price and project-execution risks.

• RWE

  Preferred European utility exposure to flexible generation, trading and data-centre demand

  Strengths

  Merchant generation, trading and flexible assets offer exposure to power scarcity and volatility.

  Comparison

  Barclays identifies RWE as a leading European AI-power beneficiary.

  Risks

  Funding, regulatory and power-market risks.

• NextEra Energy (NEE)

  Cautious credit view

  Strengths

  Commitment to credit ratings is noted.

  Weaknesses

  Persistent funding requirements following the Dominion acquisition are expected to weigh on spreads.

  Comparison

  Barclays prefers other utility credits with stronger relative positioning.

  Risks

  Large financing needs and spread pressure.

Key data

• Global energy-demand growth1.9% CAGR, 2025-2050EBarclays base-case forecast.
• Annual energy investment~$3.6tn in 2027Expected to grow more than 5% per year across supply, power systems and end-use infrastructure.
• Data-centre incremental energy demand~32 quad Btu by 2040Associated with more than 600GW of data-centre capacity in Barclays' model.
• Data-centre electricity use565TWh in 2026; 945TWh by 20302026 is up 26% from 447TWh in 2025; the 2030 figure is the cited IEA projection.
• Grid investment needMore than $600bn by 2030Up from roughly $400bn annually, according to the report's cited IEA estimate.
• Global oil demand~110.6mb/d by 2030Barclays forecasts ~1.1mb/d annual growth from 2027-30.
• Brent mid-cycle equilibrium$85/b in 2030Compared with a $70/b forward-implied average at the time of writing.
• Preferred Overweight stocks' average metrics2028 EPS forecasts 11% above consensus; 30% potential upsideFigures refer to Barclays' preferred global Overweight equity selections.

Impact & implications

Barclays sees the investment opportunity extending beyond fuel producers to firms that provide secure molecules, transport and export infrastructure, firm and distributed power, grids, storage, energy services and financing. It expects security and reliability to command a premium, but says financing capacity, contract quality, regulation and execution will determine which assets convert strategic demand into returns.

Risks

• AI efficiency gains could reduce computing and power required per unit of output faster than workloads expand.
• Grid congestion, equipment lead times, labour shortages, permitting resistance and local opposition could delay data-centre and power-infrastructure build-out.
• A durable peace, reopening of the Strait of Hormuz or faster supply normalisation could weaken refining margins and compress energy risk premia.
• EV adoption forecasts face regulatory risk, particularly if incentives or mandates are rolled back, and China weakness could slow global EV growth.
• Large capex programmes may require more debt and equity, creating affordability, dilution, leverage and credit-spread risks.
• A global LNG-capacity glut later in the decade could lower international gas prices and increase volatility.

What to watch

• Data-centre capacity additions, hyperscaler contracts, interconnection outcomes and the realised share of announced projects.
• Grid build-out, transformer and turbine lead times, connection queues and permitting reform progress.
• Oil inventories, spare capacity, non-OPEC supply growth, US shale productivity and the duration of geopolitical disruptions.
• Commodity prices versus the Brent forward curve and refining-margin normalisation.
• Capital discipline, funding plans, equity issuance and credit metrics for utilities, LNG projects and energy infrastructure.
• Policy support for EVs, renewable integration, nuclear, domestic-content rules and large-load tariffs.