Geopolitical instability is threatening to push fuel costs higher and cause further disruption to international supply chains, according to a new report from McKinsey & Company.
The consultancy’s Global Energy Perspective 2026 report says demand for energy increased by 2.7 per cent overall globally in 2025 – for oil, gas, coal and renewables.
The report says rising geopolitical divisions could push up fuel costs by making transport routes longer, increasing insurance premiums and reducing flexibility for businesses that transport goods around the world. It cites the impact of this year’s Strait of Hormuz crisis, when the numbers of vessels through the waterway fell by more than 90 per cent, with disruption affecting nearly a quarter of oil trade and 19 per cent of liquefied natural gas supplies.
McKinsey also warns that future disruptions may come from shortages of critical minerals, batteries and infrastructure, in addition to pressure on oil and gas.
The report says businesses should factor in a wider range of possible energy scenarios when planning investments and managing risks.
You can download the McKinsey report for free here.