The IEA continues to assess the energy security implications of the situation in coordination with governments around the world. A new report, Sheltering from Oil Shocks, also outlines demand-side measures that governments, companies and households can take to help ease price pressures on consumers. Ensuring energy security has been at the centre of the IEA’s mission since its founding in 1974 following the major oil crisis the year before. A critical aspect of this work has been to help coordinate collective responses to major oil supply disruptions by providing additional oil to the global market on a short-term basis.

In our forecast, net exports of U.S. natural gas (exports minus imports) grow 18% to 18.7 billion cubic feet per day (Bcf/d) in 2026. The competitive wholesale market enabled the eventual development of the corporate virtual power purchase agreement (VPPA), by providing a liquid reference price against which the VPPA settles financially. See our blog post, « Introduction to Virtual Power Purchase Agreements » for more details on how this contract works. Around 25% of the world’s seaborne oil trade transited the Strait in 2025, and options for oil flows to bypass the Strait of Hormuz are limited. Only Saudi Arabia and the UAE have operational crude pipelines that could potentially reroute flows to bypass the Strait, with an estimated 3.5 mb/d to 5.5 mb/d of available capacity.

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A portfolio might include oil and gas producers such as BP (BP), renewables companies like First Solar (FSLR), or nuclear utilities such as Constellation Energy (CEG). Although some companies focus exclusively on upstream, midstream, or downstream operations, the largest oil and gas companies are vertically integrated, meaning they operate in every part of the supply chain, from extraction to refining to retail. That end-to-end presence may provide steadier revenue than companies limited to a single segment and often makes them more recognizable to consumers. The energy sector includes various companies that perform different roles in getting fuel and electricity from their sources to consumers and businesses. Some specialize in exploration or production, while others focus on transportation, distribution, or retail. Some regulated states with vertically integrated utilities still join an RTO for grid services.

• Customers in traditionally regulated markets with vertically integrated utilities are largely limited to green power products offered by their utility, which are called « utility » products or « green pricing » products.
• At the highest level, the network covering the lower 48 states is comprised of three major interconnections, functioning predominantly independently of one another with limited exchanges of power between them.
• In this article, we answer those questions, discuss the difference between regulated and deregulated energy markets, and more.
• In this primer, we will explore how energy markets work, the importance of competition in the energy markets, and how that affects the options that corporations have when buying renewable energy.
• At the same time, electricity must also be produced and delivered in sufficient quantities when there is no wind or sun.

Region

Governments worldwide are pursuing energy independence and seeking to reduce emissions, often through policies that promote renewables or penalize carbon-heavy fuels. Still, demand for electricity and transportation fuel has continued to climb, driven by population growth, rising household incomes, and urbanization. LevelTen Energy is the leading provider of transaction infrastructure for the clean energy transition, connecting buyers, sellers, and financiers through an international marketplace powered by trusted data and automation. The LevelTen Marketplace supports power purchase agreements (PPAs), energy attribute credits (EACs), capacity, hybrid PPAs, granular certificate trading, and storage, so organizations can execute and manage clean energy transactions with confidence.

China, the United States, and Japan hold most strategic oil inventories in 2025

The energy sector gives you a wide range of ways to invest, whether you’re interested in fossil fuel producers, renewables, utilities, or a mix of all three. As the market continues to change, you can build a portfolio that balances the stability of established companies with the growth potential of those contributing to the shift toward lower-carbon energy. ETFs and mutual funds provide exposure to different parts of the sector without putting all your money into one company or technology. Coal, oil, and natural gas have long dominated global supply, but renewables have steadily gained ground, and interest in nuclear power has also grown. Examples include gas stations and utilities that supply electricity or natural gas to homes and businesses. Drivers cut back when fuel prices are high, and manufacturers may scale down during downturns.

The energy market: Oil, solar, and everything in between

Overall, it is better for consumers to have a transparent model that reveals the true costs of energy and provides incentives for individuals to become active in generating their own electricity. To diversify within the sector, some investors use exchange-traded funds (ETFs) that group related stocks under a single ticker. For example, the Energy Select Sector SPDR ETF (XLE) focuses on oil and gas producers, while the Global X Solar ETF (RAYS) includes solar equipment manufacturers like Enphase Energy (ENPH).

Shell Agrees to Buy Canada’s ARC Resources for $13.6 Billion

CAISO similarly does not run a capacity market and relies on retailers to ensure resource adequacy to meet NERC reliability requirements. It is legitimate for countries to take emergency measures such as temporary relief from some taxes or charges to ease the burden on consumers, especially the most vulnerable, from periods of short-term market turmoil. Customers in traditionally regulated markets with vertically integrated utilities are largely limited to green power products offered by their utility, which are called « utility » products or « green pricing » products. These are « bundled » products that include renewable energy certificates (RECs) with electricity service. Participating customers usually pay more for renewable electricity https://holidaynewsletters.com/why-co-living-is-the-smart-choice-for-young-professionals-in-singapore.html in their electric utility bill. Another green power product only available in traditionally regulated markets are « green tariffs, » which are bundled green power products from specific renewable energy projects procured through special utility tariff rates.

The War in Iran and Closure of the Strait of Hormuz Could Focus Greater Attention on Latin America’s Energy Prospects

Monthly and yearly energy forecasts, analysis of energy topics, financial analysis, congressional reports.

The Middle East and Global Energy Markets

In exploring the most recent market and policy developments as of April 2022, our Renewable Energy Market Update forecasts new global renewable power capacity additions and biofuel demand for 2023 and 2024. It also discusses key uncertainties and policy-related implications that may affect projections for 2024 and beyond. Market structure also significantly impacts an electricity consumer’s ability to engage in a power purchase agreement (PPA). To engage in a physical (direct) PPA, an electricity consumer must be in a competitive retail market, and the project must be in a competitive wholesale market that is interconnected with the consumer’s ISO.

Large energy-intensive industries – including steel, aluminium and cement – have been directed to cut production. In the northeast provinces of Heilongjiang, Jilin and Liaonin, even households are suffering power cuts, which is likely to have policy implications. The Gulf region is a key source of exports of refined oil products to global markets, notably for middle distillates such as diesel and jet fuel. Gulf producers exported 3.3 mb/d of refined oil products and 1.5 mb/d of liquefied petroleum gas (LPG) in 2025. Nearly 3 mb/d of refining capacity in the region has shut due to attacks and a lack of viable export outlets.

Energy investments come with distinct risks that may not be as pronounced in other sectors. Commodity prices are famously volatile and often react to geopolitical events, extreme weather, or changes in supply strategy by major producers. Government policy can also have a major impact, from shifting subsidies for renewables to new drilling restrictions for oil and gas. Upstream companies are responsible for extracting energy from the ground, whether by drilling for oil and gas or producing electricity from hydroelectric dams, wind turbines, solar panels, or nuclear reactors. In the meantime, fossil fuels and renewables are expected to coexist for years, giving investors a broad mix of choices—from legacy oil giants to companies at the forefront of the energy shift.