Goldman Sachs: Three Major Insights from the Middle East Energy Shock—Structural Bullishness for Photovoltaics, Strengthened Coal Demand, and Pressure on Developing Countries

```

The Middle East conflict is reshaping the global energy landscape, with solar energy and coal potentially becoming the biggest winners.

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 use their purchasing power to seize energy resources, while low-income countries like Bangladesh and Pakistan may lose out in the bidding process and face dual risks of energy and manufacturing shutdown. The rising cost of imports and anxieties over energy security are accelerating the global shift to local energy sources, making solar power a structurally bullish direction.

Meanwhile, some South Asian and Southeast Asian countries, lacking the capacity to deploy renewable energy quickly, are reverting to cheaper and more accessible coal, a trend expected to sustain global coal demand in the coming years.

Energy changes amid conflict: high-income countries grab resources, surge in solar and coal

Low-income countries face a higher risk of energy supply disruptions. After the EU sharply cut Russian gas imports in 2022 and shifted to LNG, global gas prices rose. Developed economies maintained imports with their purchasing power, but price-sensitive low-income countries like Bangladesh and Pakistan lost out in the bidding, leading to a substantial drop in LNG share. The report points out that by March 2026, oil and gas imports in most major importing countries have significantly declined year-on-year, and low-income economies will still face higher supply shortage risks after energy flows recover.

Solar energy is structurally bullish. The 2022 energy crisis unexpectedly accelerated global solar installations. China had already adjusted its transition path from "coal-to-gas" to "coal-to-renewables" before the crisis; Europe also accelerated its photovoltaic deployment. The Middle East conflict will drive economies further toward local energy, aligning closely with the structurally bullish outlook for solar and global electricity demand.

Coal demand is regaining support. Unlike developed economies, South Asian and Southeast Asian countries such as Vietnam, Pakistan, and Bangladesh showed a clear reversal from natural gas to coal after 2022. Lacking conditions for rapid expansion of renewables, these countries rely on cheaper and more available coal to ensure energy security. This trend will continue to support global coal demand in the coming years.

In the short term, the energy recovery process for low-income countries is more fragile; in the long term, deepening energy security anxiety will benefit both global solar capacity expansion and Asian coal demand—a seemingly contradictory yet parallel structural narrative, and the very complexity investors should be wary of in current energy investments.

Risk Warning and DisclaimerThe market has risks, and investment should be cautious. This article does not constitute personal investment advice, nor does it take into account the individual investment goals, financial situation, or needs of any user. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific situation. Investing based on this is at your own risk. ```