Major players in the oil and gas industry are reallocating investment toward Southeast Asia and Latin America, according to comments by Eni chief executive Claudio Descalzi. Speaking Thursday to a parliamentary committee, Descalzi said prolonged shipping disruptions in the Strait of Hormuz have prompted a reassessment of where capital is deployed.
Descalzi cautioned that, even if peace returns to the Middle East, the region will carry elevated risk compared with prior conditions. He said Russia and Gulf nations, including Iran, will face extended limitations in their ability to supply energy products.
When those constrained suppliers eventually resume deliveries to global markets, Descalzi added, the environment will not mirror previous arrangements. He said the return of these sources will be accompanied by significantly different conditions, without specifying additional details.
The recent crisis around the Strait of Hormuz has drawn fresh attention to alternative development areas. Descalzi said that this heightened focus is attracting both energy companies and countries that are seeking stable sources of oil and gas.
Among the regions identified as presenting development opportunities, Descalzi highlighted Southeast Asia, South America and Africa. He noted that Southeast Asia and South America, in particular, are expected to see substantial inflows of investment as the industry pivots away from higher-risk corridors.
The comments underline a strategic shift in where exploration and production capital may be concentrated in coming years, according to the Eni executive's testimony. They reflect industry responses to disruptions that have underscored vulnerabilities in key maritime chokepoints and the ongoing constraints affecting several traditional suppliers.
Summary of remarks
- Industry capital is moving toward Southeast Asia and Latin America after extended shipping disruptions in the Strait of Hormuz.
- The Middle East will be viewed as higher risk even after a return to peace, according to Descalzi.
- Russia and Gulf nations, including Iran, will be limited in supplying energy products for an extended period; when they return to markets conditions will be substantially different.