Oil Industry Shifts Capital to Asia, Latin America on Geopolitical Risk, Says Eni CEO

The global oil and gas industry is strategically redirecting capital investment toward Southeast Asia and Latin America in response to heightened geopolitical risks and shipping disruptions in the Middle East, according to Eni (BIT:ENI) CEO Claudio Descalzi.

Speaking before a parliamentary committee on Thursday, Descalzi identified the two regions as primary beneficiaries of this investment shift, noting they are now attracting significant interest from both energy companies and nations seeking to secure new oil and gas supplies.

Geopolitical Risks Drive Diversification

The primary catalyst for this strategic pivot is the extended disruption to shipping in the Strait of Hormuz, a critical chokepoint for global energy transit. Descalzi told the committee that these events have forced the industry to re-evaluate its geographic concentration and seek out more stable development areas.

He asserted that the Middle East will be perceived as a higher-risk region for the foreseeable future, even after any potential return to peace. This sentiment underscores a long-term change in risk assessment for what has traditionally been the world's most important energy-producing region.

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Long-Term Market Impact

Descalzi warned that the ability of Russia and Gulf nations, including Iran, to supply energy products will likely remain limited for an extended period. This creates a supply vacuum that other regions are poised to fill.

According to the Eni chief, when these traditional suppliers eventually return to the market at full capacity, the commercial conditions and contractual arrangements will be substantially different from previous norms. While Africa also shows promise for development, Descalzi highlighted Southeast Asia and South America as the regions expected to draw the most substantial new investment in the near term.