Goldman Sachs: Three Key Revelations from the Middle East Energy Shock—Structurally Bullish on Solar, Strengthened Coal Demand, and Developing Countries Under Pressure
A Goldman Sachs report indicates that if the Middle East conflict continues, high-income nations will leverage their purchasing power to secure energy, leaving low-income countries like Bangladesh and Pakistan at risk of supply disruptions and manufacturing shutdowns. High import costs are driving a global shift toward localized energy, leading to a structurally bullish outlook for solar power. Meanwhile, some nations in South and Southeast Asia, lacking the capability to rapidly deploy renewable energy, are reverting to coal, which is expected to receive sustained demand support over the coming years
The Middle East conflict is reshaping the global energy landscape, with solar power and coal potentially emerging as the primary beneficiaries.
Goldman Sachs analysts Hongcen Wei, Daan Struyven, and Samantha Dart stated in their latest report that if the conflict persists, high-income importing countries will leverage their purchasing power to secure energy resources, while low-income countries such as Bangladesh and Pakistan may lose out in the bidding process, facing the risk of dual shutdowns in both energy supply and manufacturing. High import costs and energy security anxieties are compelling a global acceleration toward localized energy, with solar power becoming a structurally bullish direction.
Concurrently, some countries in South and Southeast Asia, lacking the ability to rapidly deploy renewable energy, are returning to cheaper, more accessible coal, a trend expected to continue supporting global coal demand in the coming years.
Energy Transformation Under Conflict: High-Income Countries Snatch Resources, Solar and Coal Surge
Low-income countries face higher risks of energy supply disruptions. Following the significant reduction of Russian gas imports in 2022, the EU turned to LNG, driving up global gas prices. Developed economies maintained their imports through purchasing power, while price-sensitive low-income countries like Bangladesh and Pakistan lost out in the bidding, leading to a sharp contraction in their share of LNG. The report indicates that by March 2026, oil and gas imports for most major importing countries had significantly declined year-on-year, and low-income economies still face higher risks of supply gaps even after energy flows recover.
Solar power is structurally bullish. The 2022 energy crisis unexpectedly accelerated global solar installations. China adjusted its transition path from "coal-to-gas" to "coal-to-renewables" even before the crisis; Europe similarly accelerated its photovoltaic deployment. The Middle East conflict will drive economies to lean further toward localized energy, which aligns closely with the bullish outlook for structural growth in solar power and global electricity demand.
Coal demand regains support. Unlike developed economies, South and Southeast Asian countries such as Vietnam, Pakistan, and Bangladesh have shown a clear reversal from natural gas back to coal after 2022. Lacking the conditions for rapid renewable energy expansion, these countries are turning to cheaper, more accessible coal to ensure energy security. This trend will continue to support global coal demand over the next several years.
In the short term, the energy recovery process for low-income countries is more fragile; in the long term, the deepening of energy security anxieties will simultaneously benefit the expansion of global photovoltaic installations and Asian coal demand—this is a structural narrative that appears contradictory but is actually parallel, and it is precisely the complexity that current energy investments must be most alert to.
