De‑escalation or Gridlock: Private infrastructure portfolios under two Iran‑Conflict paths

Where are we today

A Major Energy Shock: In recent weeks, renewed conflict in the Middle East has triggered a material energy supply‑side shock, pushing international oil and gas prices higher. A ceasefire between the US and Iran has paused the conflict but the economic damage is already meaningful and will emerge over the coming months. The closure of the Strait of Hormuz, and damage to gas production facilities have meaningfully curtailed approximately 20% of global oil and gas reserves.

Part of a Broader Structural Shift: Viewed beyond the immediate shock, recent developments align closely with the longer‑term structural geopolitical shift that we have previously highlighted , as energy, trade and security become more tightly linked. The global economy is becoming increasingly polarised, energy dependence has re‑emerged as a key vulnerability, with countries and regions diverging more sharply based on energy security and technological capability. This is reinforcing the potential for uneven outcomes across geographies and sectors.

Macro & Market Impact: Higher oil and gas prices have lifted headline inflation and eroded near term growth momentum, particularly in energy importing regions. Europe and parts of Asia are more exposed through higher energy costs and weaker confidence, while North America has so far appeared comparatively resilient given its domestic energy base. Central banks have responded by pushing out expectations for rate cuts, reinforcing a “higher for longer” bias, while long term bond yields, equity and credit markets have experienced volatility.

Infrastructure Performance: Within listed infrastructure, sector performance since the escalation has been uneven, reflecting differences in exposure to energy prices, regulation and demand sensitivity. Energy equities have shown sharp divergence: refiners, North American shale producers and LNG‑linked companies have rallied on tighter global supply and higher global gas prices. Markets have initially rotated defensively seeking regulated and contracted exposure. Utilities have generally outperformed broader equity markets, benefiting from their defensive characteristics and inflation pass‑through, though the picture is regionally mixed.

North American utilities have shown resilience, while some European utilities are exposed to gas input costs due to reliance on gas‑fired generation. Transport assets have experienced short‑lived relief rallies, notably among airlines following ceasefire headlines, but longer‑term uncertainty persists. Logistics bottlenecks, elevated fuel costs and insurance premia may weigh particularly on the shipping and tanker segments.

For private infrastructure, the impact of the initial shock is more muted than in public markets, and more focused on fundamentals, with long‑dated contracts, regulated cash flows and appraisal‑based valuations providing a degree of insulation from short‑term volatility.

The effects on private infrastructure will unfold over time through inflation pass‑through, financing conditions, demand dynamics and discount rates effects, if the conflict persist and inflation remains elevated.

Diverging Scenarios Ahead

After a likely initial phase in the first half of 2026 characterised by higher energy prices, inflation and weaker global growth, outcomes for private infrastructure hinge on two scenarios that that will likely begin to unfold in the second half of 2026: one in which a ceasefire holds, and the shock gradually dissipates, and another in which conflict becomes protracted, prolonging uncertainty, volatility and supply chain disruptions. These scenarios carry materially different implications for macroeconomic conditions, infrastructure subsectors and portfolio positioning. We briefly assess below how infrastructure assets may respond across these two divergent paths.

Scenario Analysis: Macro and Infrastructure (12 to 18 months from Q1 2026)

Source: InfraRed Capital Partners, April 2026. There is no guarantee that the forecast highlighted will materialize.

Megatrends At A Crossroad: A prolonged conflict may accelerate the direction of infrastructure megatrends but will also likely lead to greater regional divergence, particularly when it comes to energy transition and digitalisation.

The North American market stands out due to its expected level of resilience, underpinned by energy security and deeper capital markets. Europe and parts of Asia face a more challenging outlook due to higher energy dependence and tighter financing conditions. Electrification, biofuels and transport decarbonisation are likely to gain further momentum as energy security moves to the forefront of policy priorities. Governments are expected to place greater emphasis on oil and gas supply‑chain resilience, particularly storage and strategic reserves, with several countries seeking to expand national reserve coverage from limited levels toward materially higher benchmarks. Digital infrastructure is expected to remain structurally attractive; however, persistently higher power costs may increasingly shape geographic deployment, favouring markets with access to cheaper and more reliable energy, notably the United States.

Finally, it’s worth remembering that against this backdrop, infrastructure remains well positioned to generate durable, long‑term value for investors who are able to navigate regional divergences and align capital with the structural forces reshaping energy systems and digital demand.

Authored by:

Gianluca Minella,

Head of Research

¹ Macrobond, April 2026

² InfraRed Capital Partners, Geopolitics and Infrastructure Investment, February 2026

³ Macrobond, April 2026

⁴ Macrobond, April 2026

⁵ Allocations are derived from portfolio optimisation outputs and reflect relative shifts in risk preference rather than absolute return forecasts.

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