For investors, recent events in the Middle East raise an important financial planning question: what role should renewable energy play in a long-term portfolio, particularly when conventional energy has historically been a strong source of returns?
The energy sector has delivered meaningful growth for many investors, supported by long-term demand for oil and gas. It is therefore reasonable to ask whether reducing exposure to traditional energy companies and investing more in clean energy could affect long-term growth.
Nobody can answer that with certainty. However, the recent conflict in the Middle East has shown that the relationship between oil and gas prices, energy security and investment performance is not always straightforward.
Rethinking energy exposure in uncertain markets
It may be tempting to assume that oil and gas investments would outperform during a supply crisis, particularly when disruption affects routes such as the Strait of Hormuz. Yet clean energy investments can also benefit when investors focus on energy independence, rising electricity demand and the long-term transition away from fossil fuels.
The rise of electricity demand
Historically, oil and gas companies benefited from a world where energy demand kept rising. Today, that picture is changing. The International Energy Agency has described strong growth in electricity demand as the beginning of a new “Age of Electricity”, driven by the growing use of electricity in homes, transport and businesses, as well as demand from data centres.
Artificial intelligence is one clear example of this trend. It uses significant amounts of power and is adding to expectations that electricity demand will continue to rise. Alongside electric vehicles, heat pumps and the wider move towards electric power, this may create opportunities for companies involved in producing, storing and supplying electricity.
Why renewables remain a long-term opportunity
Renewables are central to this shift because they are among the lowest-cost ways to generate new electricity in many parts of the world. The long-term growth opportunity that once sat mainly with fossil fuels may increasingly be linked to electricity, power grids, energy storage and renewable generation.
Energy security is another important consideration. The oil crises of the 1970s showed how vulnerable economies can be when they rely heavily on imported fossil fuels. More recently, Russia’s invasion of Ukraine and renewed instability in the Middle East have reinforced the same lesson. In 2026, energy independence is increasingly linked to established low-carbon energy sources available closer to home.
From a UK perspective, sustained investment in domestic low-carbon energy may help reduce exposure to volatile global fossil fuel markets, while supporting a more resilient energy system.
For investors, this means the case for renewables is not only about environmental values. It is also about long-term demand, investment in energy infrastructure, diversification and resilience. Short-term performance will remain uncertain, and clean energy investments can be volatile, but the long-term reasons for considering the sector remain important.
How can renewables feature in your portfolio?
For many investors, renewable energy exposure is already part of a diversified portfolio, often through a range of funds such as multi-asset, actively managed, model portfolio or ESG-focused funds.
As with any investment, renewables are not without risk. They can be affected by government policy, interest rates, funding costs, technology costs and wider market sentiment. This is why diversification remains key. Rather than reacting to short-term events, a well-constructed portfolio spreads investment across different asset classes, regions and sectors to help manage risk over time.
Recent events have renewed focus on energy markets, but they also reinforce a longer-term message. Future energy demand is increasingly linked to electricity, energy security and domestic resilience. For investors, this underlines the role renewables can play as part of a considered, diversified and long-term investment strategy.
Your Origen Ethical Futures adviser can help ensure your portfolio remains aligned with both your financial objectives and personal values. Speak to us to understand how renewable energy can support your long-term investment strategy and help make your money change your world.
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