Global investment firm Gavekal Research has projected that the next major bull market will be driven by traditional energy sources, particularly oil and coal, as energy security increasingly reshapes global investment strategies.
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The report signals a structural shift in financial markets, noting that conventional portfolio models such as the 60/40 stock-bond strategy are becoming less effective in an environment marked by persistent inflation, geopolitical tensions and supply disruptions.
According to Gavekal, the global economy is entering a phase where energy security is taking priority over energy transition goals, leading to renewed importance of fossil fuels. Years of underinvestment in oil, gas and coal, combined with ongoing geopolitical risks, have tightened supply and elevated the strategic value of energy assets.
The report also highlights strong profitability in the refining segment, with refining margins rising due to constraints in processing capacity. These conditions are expected to persist even if geopolitical tensions ease, supporting continued strength in energy markets.
Gavekal suggests that investors may need to reposition portfolios towards real assets and energy-linked sectors, including commodities, energy producers and infrastructure tied to fossil fuel supply chains, to better navigate the evolving macroeconomic landscape.
The broader implication is a shift away from growth-heavy portfolios towards tangible, supply-constrained assets that offer resilience against inflation and global uncertainty.
As global dynamics continue to evolve, oil and coal are expected to play a central role in the next investment cycle, potentially redefining capital allocation strategies across international markets.
