Middle East

War-damaged Gulf energy infrastructure requires natural gas turbines already identified as among the world's scarcest goods due to AI data center buildout — adding a new demand shock to the power generation equipment industry supply chain.

AI data center facilities in the Middle East risk becoming military targets in future conflicts, redirecting compute demand domestically — but US power, permitting, and labor constraints make full substitution infeasible, so near-term AI CapEx trajectory remains intact with longer-term buildout pace uncertain.

Persian Gulf oil disruptions expose the vulnerability of fossil fuel dependence — Galloway argues it's far harder to block the sun or wind than the Straits of Hormuz, and countries watching price spikes will accelerate domestic energy investment.

Zinc smelters are heavily dependent on cheap energy feedstock. Brackett explains the Middle East was 'both a local and global source of cheap energy,' and operators that invested locally 'are seeing consequences' as the conflict disrupts their feedstock.

Middle Eastern zinc smelters depend on cheap local natural gas; the war has disrupted that feedstock, pushing zinc prices higher — the same energy-intensity mechanism driving aluminum's rally, though zinc is somewhat less electricity-intensive.

Middle East crude exports represent ~20% of global supply, and analyst Rory Johnston argues supply-demand math demands $200/barrel if the conflict continues — yet oil remains strikingly underpriced, suggesting markets are in a complacent 'waiting period.'