Faced with macro headwinds, the operating environment for energy and natural resources (ENR) companies have become more complex over the past year. While companies continue to focus on competitiveness, affordability, and investment returns, Bain & Company’s insights/energy-agenda-2026-returns-restructuring-and-resilience/”>2026 Energy & Natural Resources Survey found that ENR leaders across geographies are divided when it comes to optimism in transition-oriented investments and peak oil expectations.
Bain’s annual survey of more than 800 executives globally across oil and gas, utilities, chemicals, mining and agribusiness, finds that economics will continue to drive where capital flows, consistent with continued capital investments in fossil fuel technologies, as most executives anticipate global oil demand to keep rising for at least the next decade. However, the peak oil outlook varies by region, reflecting differences in natural assets, energy security, and geopolitics. Half of European oil and gas executives think demand could peak before 2035, while 41% of North American executives don’t see it happening until after 2050.
The paths for transition-oriented businesses are also diverging. Companies that were already investing significant capital in these areas remain committed, while those that were allocating less are pulling back, Bain finds. Regional dynamics play a major influencing factor as more than half of companies in Europe allocate a significant amount (defined as more than 20% of total capital) to transition-related investments, compared to only a quarter of companies in North America and most other regions.
“While executives are prioritizing securing competitive advantage and access to affordable, reliable clean energy as well as reducing carbon emissions, there’s also a stronger consensus on global net-zero aspirations pushing out beyond 2070,” said?Joe Scalise, global head of?Energy & Natural Resources at Bain & Company.
“Increasingly, geopolitics and policy environment are impacting how ENR leaders across the globe view transition-oriented investments differently. This reflects the complexity of the energy transition and the fact that the necessary policy support that many advocates hoped for hasn’t come to fruition.”
Surveyed executives shared the transition-oriented technologies with the strongest business prospects over the next 10 years: energy storage, transition materials, and advanced nuclear technology. They are least optimistic on low-carbon hydrogen, synthetic fuels, and direct air capture.
The report highlights four key trends that are top of mind for ENR leaders:
(1) Geopolitical swings are reshaping investments in real time
Local is now the best bet, according to Bain’s survey. Executives across the globe prefer transition-oriented investments in their local regions. While North America remains the most favored investment destination overall, the share of executives who rate it attractive has dropped by 22 percentage points (pp) to 46% compared to the previous year. Three-quarters of executives who consider North America unattractive say that reducing policy uncertainty would have a very significant effect on their company’s ability to scale up the deployment of capital into that market.
While most markets saw a decline in transition-oriented investment attractiveness overall, China has bucked the trend with a notable increase of 14 pp to 39%.
(2) More restructuring is coming
2025 saw some of the most compelling M&A moves across the energy and natural resources sectors particularly in oil and gas and mining. Two-thirds of executives expect an increase in portfolio restructuring in their industry–divestments, consolidation, and closures—over the next two years. Chemicals (87%) and mining (72%) executives expect the most restructuring in their respective sectors.
Overall, ENR leaders say their companies are contending with market volatility, rising costs, and heightened competition, which continue to pressure margins and complicate long-term planning.
(3) AI experiments have proliferated, but ROI is scarce
About two-thirds of industry executives say their company is either experimenting with AI or running pilots without seeing aspired outcomes, but only a quarter have progressed to scaling up AI applications and reimagining functions with measurable impact.
The most mature applications are in?customer service, R&D, and operations/maintenance; for each, over?10% of respondents?say that AI is?scaling?up or fully?transforming?the function.
(4) AI’s surging power demand is pushing utilities toward the most bankable bets
Utilities executives broadly view rising load growth from AI as “challenging but can meet demand if all things go right”. To do that, they are prioritizing the fastest and most commercial options. Energy storage leads the popularity vote, followed by extending the life of existing assets, stepping up investment in transmission and distribution, as well as adding natural gas and onshore renewables assets.
Executives globally are now more focused on co-investing with tech companies to help fund these investments than relying on government support—a reversal from last year’s survey.
Once again, the report finds regional differences
While most executives in Asia-Pacific and the Middle East plan to co-invest with tech partners, North American executives are more likely to rely on higher prices for large-demand customers. European leaders lean toward recycling capital.
“As ENR executives translate today’s industry signals into action, the mandate for tried and true business discipline is as clear as it has ever been: focus on investments grounded in the physics and economics, and bankable with clear line of sight to the explicit or implicit role of policy,” said Grant Dougans, a partner and leader in Bain’s Energy & Natural Resources practice. “Companies will need to carefully invest in areas where they are advantaged, including in AI; carve a portfolio where they can win, understand how governments think in priority markets and yet be flexible enough to withstand volatility.”