Energy Cycle Reawakens as Supply Constraints Meet Rising Demand

Schroders argues that the Iran crisis is accelerating a structural shift already underway in global energy markets.

• Years of underinvestment have constrained supply, with reserve levels declining and new project pipelines limited.
• The disruption of key trade routes, including the Strait of Hormuz, is amplifying existing supply tightness and driving price volatility.
• Demand is strengthening structurally, supported by electrification, decarbonisation and AI-driven data center expansion.

If supply remains slow to respond, the report suggests energy markets may enter a sustained investment cycle with implications for inflation and asset allocation.