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

Barclays analysts have indicated that the worldwide energy industry could need roughly $3.6 trillion in investment each year by 2027, as artificial intelligence, electrification and worries about energy security push demand ahead of what supply and infrastructure can handle.

At that scale, energy would rank among the largest capital-allocation opportunities of the next decade, touching oil and gas, LNG, pipelines, power generation, electricity grids, renewables, storage and electrification. Annual spending is projected to increase by more than 5% and reach over three times the capital needed for the planned AI infrastructure build-out.

Rather than a straight swap of renewables for fossil fuels, the bank sees the global economy moving into a phase described as “energy addition,” with conventional and low-carbon energy demand climbing at the same time.

World energy demand is expected to rise at a 1.9% compound annual rate from 2025 through 2050. Data centers alone could add roughly 32 quadrillion BTUs of energy demand by 2040, equal to more than 600 gigawatts of capacity and close to Russia’s entire energy consumption in 2025.

AI is already adding strain to power systems. Global data center electricity use is forecast to hit 565 terawatt-hours in 2026, up 26% from 2025, and power demand could reach 290 GW by 2030.

A long stretch of underinvestment is also producing bottlenecks. Upstream oil and gas capital expenditure remains about 45% below its previous peak, while more than 2,500 GW of renewable, storage and large-load projects are waiting to connect to grids worldwide.

As a result, grids, transformers, substations and transmission systems are emerging as key constraints on both AI expansion and electrification.

Investment possibilities span upstream producers, oilfield services, LNG, pipelines, utilities and clean technology. Companies with solid balance sheets, strategic assets and access to capital are considered especially well positioned.

For its preferred energy stocks, Barclays’ 2028 earnings estimates run on average 11% above consensus, with price targets implying roughly 30% potential upside. European and U.S. oil services offer some of the largest possible earnings upgrades.