The Middle East crisis will "leave a lasting mark on energy investment strategies and flows," the International Energy Agency said in a report today.

Why it matters: This year's annual investment report offers wide-angle and detailed looks at a vital question: what the crisis means for investment in clean tech and fossil fuels alike.

📈 Energy security needs and "changing perceptions of risk and reliability" could bring oil and gas importing countries to look more to renewables, nuclear and coal.

• "Renewable energy resources are widely distributed around the world, and preliminary signs indicate that deployment is picking up in some markets heavily affected by the energy crisis," it states.
• Solar panel imports in developing Asian and African markets have jumped of late.

🦋 Change is already afoot. Countries are making new policy in response to scarcity and high prices that could extend beyond short-term emergency measures.

• For instance, countries including Vietnam — a huge fuel importer — plan to expand or extend electric vehicle incentives.
• Twenty countries have already announced new energy efficiency policies in response to the crisis.

🛶 But there are crosscurrents for clean tech. If the crisis keeps borrowing costs high, that disproportionately hits low-emissions projects.

• Clean energy can have higher upfront costs even though projects have lower operating costs than fossil fuels.

🛢️ Investment in oil projects is slated to decline in 2026 — partially because the conflict has cut income for Middle East exporters.

• That said, oil companies see prices staying above pre-conflict levels. IEA sees "renewed interest" in developing offshore projects in Africa, Asia and Latin America, and onshore in Venezuela.
• But uncertainty over prices, long project lead times, supply chain constraints and a tight offshore rig market limit near-term spending.
• "[A] higher-for-longer price could boost spending on some short-cycle assets, notably US shale."

Catch up quick: Over 30 Middle East energy facilities have been damaged, including refineries, oil and gas production sites, and liquefied natural gas infrastructure.

• Twenty tankers have been hit by missiles or drones.
• "The total repair bill is difficult to establish with any precision, but is set to run into tens of billions of dollars," IEA finds.

Driving the news: The report takes stock of other big trends too, including AI data centers.

• "Orders for new natural gas-fired power plants surged to 130 GW [gigawatts] in 2025, a 25-year high, with US data centre demand a major factor."

What we're watching: Coal, the most carbon-intensive fuel. Supply investments are slated to reach $180 billion in 2026, the most since 2012, concentrated in China and India.

• The crisis might "buttress spending on coal in the main Asian markets" in the near term, but the longer-term outlook is unclear.
• For comparison, global renewable power project investment is projected at $665 billion this year.

The bottom line: "The way that global oil and gas supply — and large parts of the global economy — can be disrupted by blocking a 50-km wide waterway will not be quickly forgotten," it finds.

IEA's report calls this data ☝️ among the early signs that "consumers are turning to electrification in response to supply disruptions."

• And not shown above is a huge increase in induction cookstove sales in India, where liquefied petroleum gas has become scarce.

What we're watching: There are multiple reasons for rising sales and exports, and of course the war started two-thirds of the way into Q1.

• Data for April-June should provide a fuller sense of the war's early effects on use of substitutes for oil and natural gas.

Two Democratic governors who may have national aspirations — Pennsylvania's Josh Shapiro and New Jersey's Mikie Sherrill — just unveiled new safeguards on data centers.

Why it matters: Both governors are looking for safe political ground in the increasingly treacherous landscape around AI and data centers.

• "We are ready to innovate to power the jobs of the future. We can't do that if we let bad actors drain our resources and stick our communities with the bill," Sherrill said in remarks yesterday introducing the plan.
• Shapiro is widely considered a potential 2028 Democratic presidential hopeful, while Sherrill is also mentioned as a possible candidate for higher office.

Driving the news: Shapiro yesterday released details of his Governor's Responsible Infrastructure Development Standards, first announced in broad strokes in February.

He's urging the state legislature to ensure that tax breaks can only flow to data center developers that meet requirements around...

• Providing and paying for energy without burdening other ratepayers.
• Community notification and disclosure on energy and water use and project size.
• Labor rules, environmental protection, and offering community benefit packages.

Zoom in: It lays out lots of specific requirements for projects.

• They include escalating mandates to source clean energy, reaching 32% by 2035; funding needed grid upgrades; creating at least 200 prevailing wage construction jobs; pollution standards for backup generators; and more.

Catch up quick: Sherrill yesterday said she's working with state lawmakers on measures with similar aims, though the rollout offered less detail.

• It seeks rules to "ensure data centers bring new clean energy online" and shift costs away from ratepayers; disclosure mandates on energy and water use; and community benefits and labor provisions.
• "If you're going to build a data center here, you should be using union labor and paying prevailing wages," she said in Trenton.

The bottom line: Potential Democratic 2028 hopefuls are staking out turf on the topic.

• A number mirror Shapiro and Sherrill — demanding safeguards around energy costs but not rejecting development outright.
• But Rep. Alexandria Ocasio-Cortez has floated, with Sen. Bernie Sanders, a nationwide moratorium until Congress passes sweeping AI legislation.

🤝 Data center investor DigitalBridge is acquiring ArcLight Capital Partners, an energy-focused private equity firm, in a $1.05 billion deal.

• Why it matters: Via the FT, the deal will "marry one of the largest data centre owners with a power-focused investor that is known on Wall Street for making windfalls in coal and natural gas, and is one of the biggest private power operators in the US."

⚛️ Fusion startup Thea Energy, a Princeton University spinout, raised $100 million in Series B funding from the U.S. Innovative Technology Fund (USIT), General Innovation Capital Partners and others.

• Why it matters: It's now "among the better-funded fusion startups," TechCrunch reports.

That's the share of Exxon shareholders who yesterday approved moving its formal incorporation from New Jersey to Texas, where the oil giant favors the regulatory and legal environment.

Why it matters: Its corporate roots in New Jersey go back to the 19th century, though Exxon's home has been Texas for decades.

Friction point: Some shareholder advisory firms had recommended against the move, and the 29% vote in opposition signals some concern about weakening of investor rights. Go deeper

"In my 40-year working career, I have never once had accusations made against me such as those made in recent days. I dispute entirely this characterization of my conduct."