Barclays sees a $3.6 trillion annual investment opportunity in this sector

Investing.com -- The global energy sector could require about $3.6 trillion of annual investment by 2027 as artificial intelligence, electrification and energy-security concerns drive demand faster than supply and infrastructure can respond, Barclays analysts said.

The scale would make energy one of the largest capital-allocation opportunities of the coming decade, spanning oil and gas, LNG, pipelines, power generation, electricity grids, renewables, storage and electrification. Annual spending is expected to grow by more than 5% and reach more than three times the capital required for the planned AI infrastructure build-out.

Rather than replacing fossil fuels with renewables, the global economy is entering what the bank describes as an era of "energy addition," with demand for conventional and low-carbon energy rising simultaneously.

Global energy demand is forecast to grow at a 1.9% compound annual rate from 2025 through 2050. Data centers alone could add about 32 quadrillion BTUs of energy demand by 2040, equivalent to more than 600 gigawatts of capacity and roughly matching Russia’s total 2025 energy consumption.

AI is already intensifying pressure on power systems. Global data center electricity consumption is forecast to reach 565 terawatt-hours in 2026, up 26% from 2025, with power demand potentially reaching 290 GW by 2030.

Years of underinvestment are also creating bottlenecks. Global upstream oil and gas capital expenditure remains about 45% below its peak, and more than 2,500 GW of renewable, storage and large-load projects are waiting for grid connections worldwide.

That leaves grids, transformers, substations and transmission networks emerging as major constraints on both AI expansion and electrification.

Investment opportunities extend across upstream producers, oilfield services, LNG, pipelines, utilities and clean technology. Companies with strong balance sheets, strategic assets and access to capital are seen as particularly well placed.

Across its preferred energy stocks, 2028 earnings estimates are on average 11% above consensus, with price targets implying about 30% potential upside. European and U.S. oil services offer some of the largest potential earnings upgrades.