Morocco at an Energy Crossroads Amid Global Gas Volatility and Critical Minerals Opportunity

Disruptions to shipping routes, soaring risk premiums, and a rush on metals for electrification: the International Energy Agency’s (IEA) 2026 report identifies Morocco at a pivotal historical turning point. Between financing that has become prohibitively expensive for emerging economies and obstacles to local industrial transformation, the window of opportunity remains narrow. Details follow.

The 11th edition of the International Energy Agency’s (IEA) World Energy Investment report, published on May 28th, reveals the fractures and transformations shaping the global energy economy. As the conflict in the Middle East shakes even the most deeply held certainties, the report offers a snapshot of the capital flows that will shape tomorrow’s landscape. In this maelstrom, Morocco is not merely a bystander.

The Kingdom has caught the IEA’s attention at a pivotal moment, highlighting both the acute vulnerabilities of fuel importers and the tangible opportunities for those who know how to position themselves within the value chains of critical resources.The analysis begins with the most immediate sign of Moroccan caution. The IEA report is unambiguous: “Morocco has postponed the supply of its planned $1 billion LNG import infrastructure as part of a reassessment of its long-term gas needs.” The tectonic context surrounding this decision cannot be ignored. The global gas market is caught in a vice.

On the one hand, 2025 was a record year for final investment decisions on new liquefaction capacity, with over 100 billion cubic meters (bcm) approved, “nearly 90% of which is in the United States,” the report states. On the other hand, the Middle East crisis has “delayed the market rebalancing effects” and “renewed concerns about gas reliability and cost among price-sensitive importers.” The disruption of confidence in transit through the Strait of Hormuz is central to this reassessment.

The IEA’s assessment is as follows: “Confidence in the reliability of transit through the Strait of Hormuz has been profoundly shaken and could remain fragile even once a resolution to the immediate conflict is found.” For a country like Morocco, which has no significant domestic production and must base its import strategy on what has become structural volatility, the suspension is an admission of strategic foresight.

What is the point of investing in costly regasification infrastructure if Qatari volumes, intended to supply the market, are delayed? The IEA confirms that the first two trains of the North Field East expansion in Qatar, including 11 billion cubic meters per annum (bcm/year) expected for the third quarter of 2026, “will likely be delayed by more than a year.” This Moroccan postponement contrasts sharply with the investment frenzy observed elsewhere.

The report notes that “a record 140 billion cubic meters of new regasification capacity were commissioned in 2025, with capital expenditures totaling more than $20 billion.” But these aggregate figures mask a geographical reality: Europe absorbed half of these investments in response to the Russian invasion of Ukraine. Morocco, for its part, is observing and biding its time. Let’s just say this is the direct consequence of a world where the way in which the global supply of oil and gas, and a large part of the global economy, can be disrupted by blocking a 50-km-wide waterway is not easily forgotten.

Morocco is taking its time to see if the wave of American projects, which are struggling with rising costs, will offer a safer and more affordable alternative to the Middle Eastern corridor. It should be noted that approximately 30% of the projects under construction have experienced cost overruns, adding around $15 billion to the total expenditure.

Oil Dependence and the Long Shadow of Damaged Refineries

In addition to the gas sector, there is an oil vulnerability that IEA data relentlessly quantifies. The Africa regional section reveals that “the share of oil imports from the Middle East for Africa is 37%.” This means that more than a third of the crude oil and refined products consumed on the continent transit through a war zone. The conflict has not only disrupted shipping routes; it has physically destroyed the refining infrastructure.

The IEA has identified more than 30 damaged energy facilities, including refineries and petrochemical plants. The case of the Bapco refinery in Bahrain is emblematic: “Bapco declared force majeure and was forced to prioritize domestic supply when its capacity of nearly 400,000 barrels per day was damaged by drone strikes.”

These upstream disruptions have direct repercussions for importers. The IEA notes that the conflict “could prompt governments to be more wary of a heavy reliance on petroleum product imports” and “lead to increased spending on building up commercial and strategic reserves.”

Morocco, as a net importer, is bearing the brunt of this price and scarcity dynamic, even as global investments in refining are plummeting, “down 15% to just over $40 billion” in 2026. The equation is complex: degraded supply sources, soaring risk premiums, and a shrinking market for finished products. The suspension of the LNG project is thus part of a broader debate on the optimal allocation of financial resources in the face of an energy bill that promises to be hefty.

The emergence of Morocco as a hub for critical minerals

The second spotlight shone by the IEA on Morocco is of a completely different nature, and testifies to a promising structural transformation. In the section devoted to critical minerals, the agency establishes a direct link between the global energy transition and Africa’s subsoil. “Africa’s share of global mining investments has increased from 14% to 19% over the last decade,” the report notes.

Within this dynamic, three countries are explicitly identified as the main beneficiaries of the growth in copper investment: the Democratic Republic of Congo, Morocco, and Zambia. The significance of this identification cannot be overstated.

Copper is the metal of electrification, and the report emphasizes its central role: while investment in battery metals has collapsed, investment in copper has increased by 8%, highlighting its key role in electrification. This trajectory is all the more remarkable given that the report notes that greenfield mining spending has doubled, from approximately $3.5 billion in 2016 to just over $7 billion in 2024, and that more than 90% of this growth has been concentrated in copper.

Morocco has thus been propelled into the continental top three in this reshaping of productive investment flows. However, the analysis would be incomplete without highlighting the structural limitations identified by the IEA. The desire of African states to capture more added value is genuine. Since 2023, 13 African countries have imposed export bans on critical minerals in an attempt to increase local processing.

But the obstacles remain enormous. The diagnosis is succinct: “Water scarcity, electricity shortages, and a lack of infrastructure and human capital prevent the region from capturing a larger share of downstream value.”

Morocco, which has made industrial upgrading a strategic priority, is directly challenged by this situation. Mining investment has not yet translated into a similar breakthrough in refining, where, “despite the emergence of new projects, investment has shown only slight growth over the last decade, reaching $2.5 billion in 2024.

“The challenge for the Kingdom is to break through this glass ceiling, otherwise it will remain a supplier of raw materials, however critical they may be, in a market where value is concentrated in industrial links dominated by China, which “accounts for approximately 75% of total manufacturing investment in clean energy in 2025, including 80% of the lithium-ion battery supply chain capacity.”

The Cost of Capital as a Systemic Obstacle

Deciphering the challenges facing Morocco cannot ignore the macro-financial dimension, as financing conditions have become a key differentiating factor in global energy competition. The IEA paints an alarming picture for emerging economies. “The conflict in the Middle East has triggered volatility in financial markets, slowing short-term investment decisions and driving up long-term financing costs,” it states. The aggregate data for Africa provided by the IEA are telling: the country risk premium has jumped to 12.95%, while the currency depreciation against the US dollar has reached dizzying proportions.

For Morocco, these continental averages, while requiring some qualification, highlight a stark reality explained by the IEA: “Companies in these markets are particularly exposed because financing costs are already at least double those in advanced economies and China, and further increases could reduce project returns below levels acceptable to investors.” This rise in capital costs is having an asymmetrical impact.

The IEA is clear: “If borrowing costs remain high for longer, capital-intensive technologies will be disproportionately affected, including low-emission technologies which generally have high initial costs but much lower operating costs than fossil alternatives.”

For Morocco, which aims to develop massive renewable energy and green hydrogen projects, this assessment serves as a warning. The robustness of clean energy sources in terms of energy security works in their favor, but the financial equation is becoming more challenging.

It’s worth noting that, in this context, the suspension of the LNG terminal can also be interpreted as a financial decision: in a world where liquidity is becoming increasingly scarce, tying up a billion dollars in infrastructure whose business model is shaken by geopolitics is becoming a luxury that few states can afford.

The IEA also observes a profound shift in capital sources, with increasing involvement of institutional investors in energy companies, including public ones. This growing presence complicates the balance between national interests and shareholder returns, particularly during periods of market volatility. For Morocco, this implies a potentially reduced room for maneuver, as the demands of financial profitability sometimes conflict with the imperatives of energy sovereignty.

The Sun and the Electron: The Promise of Domestic Resilience

In this landscape of constraints, the report outlines a way out that aligns with Morocco’s structural strengths: the massive development of its own domestic resources. Energy transition experts will emphasize that the continental dynamic has been set in motion.

The IEA reveals that “15 African countries reported record solar imports of over $400 million in the first quarter of 2026, compared to $650 million for the whole of 2025.” While Morocco is not explicitly named in this segment, this continental figure validates the relevance of a solar and wind power deployment strategy in a country dependent on Middle Eastern oil. The IEA’s argument regarding the link between clean energy and economic security is compelling.

“These investments in renewable energy, nuclear power, electrification and efficiency over the past decade have tangibly improved energy security in key fuel regions and reduced emissions,” the report explains.

The quantification is precise: for five major regions (including India and Southeast Asia), “these investments have avoided approximately $260 billion in fossil fuel import costs by 2025,” with a third of these savings coming directly from renewables. Although Africa is not included in this calculation, the mechanism is perfectly applicable to a country like Morocco. Every megawatt installed is a line of defense against a dollar-denominated energy bill and is subject to the volatility of the Strait of Hormuz.

The surge in electrification, which the IEA calls the “electricity era,” is another strong signal. Electricity spending (grids, storage, generation) now accounts for nearly 60% of global energy investment. The agency welcomes a “welcome rebalancing” in favor of grids, whose global spending has jumped to $550 billion.

For Morocco, this global trend means that international donors and technical partners are structurally focused on supporting electricity infrastructure. However, here again, the report highlights the bottlenecks that threaten Moroccan ambitions: “Constraints on the speed of network expansion, including slow permitting processes in many cases, underscore the importance of investing in smarter and more efficient use of existing infrastructure.”

Caught between the hammer of the Middle Eastern crisis and the anvil of industrial competition

Ultimately, the IEA’s World Energy Investment 2026 report doesn’t tell a single story, but rather the confrontation of two forces at work in Morocco. The first is the force of shock: a residual but still significant dependence on Gulf oil, which exposes the country to systemic instability, and a gas market so uncertain that it justifies postponing a major $1 billion infrastructure investment.

The second is the force of opportunity: the assertion of a strategic position in critical minerals, coupled with the tangible benefits of deploying domestic low-carbon electricity capacity. Morocco, as it appears on the IEA’s radar, is a country that knows how to exercise tactical restraint (by suspending its LNG project) while capitalizing on its comparative advantages (copper, solar power).

Thus, the report’s conclusion resonates as an implicit roadmap for the Kingdom: “The conflict in the Middle East reinforces a shift towards security, trust and diversity as key considerations when choosing energy projects and partners, alongside costs, prices and environmental performance.”

For a country that prioritizes deep industrial integration and the decarbonization of its energy mix, aligning with this new global energy framework is a strategic validation. The emerging era, marked by the quest for resilience and supply chain diversification, offers a unique window of opportunity. Provided, as the IEA reminds us, that obstacles to financing and industrial upgrading do not, in turn, block the path.

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(Featured image by leonardo mendes via Unsplash)

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First published in LES ECO.ma. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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