America's Power Play: electricity for AI, fuel for the world 

Two power plays, one country

The US is running two energy stories at once. At home, artificial intelligence (AI) is creating demand for electricity the grid hasn't seen in a generation. Abroad, the disruption in the Gulf has turned American oil and gas into a strategic asset. For traders, the two stories overlap more than you might expect.

Play 1: the electricity squeeze

After two decades of flat demand, US power consumption is climbing again. The US Energy Information Administration (EIA) projects that demand will rise from a record 4,195 billion kilowatt-hours (kWh) in 2025 to 4,288 billion kWh in 2026 and 4,356 billion kWh in 2027, largely due to AI and crypto data centres.¹

The data centre numbers are steeper still. Goldman Sachs forecasts US data centre power demand more than doubling from 31 gigawatts (GW) in 2025 to 66 GW in 2027.² And supply can’t keep up: Goldman estimates that only about 50–60% of the capacity scheduled for the next one to two years will come online on time.² Political opposition is growing too. A summer survey by the Annenberg Public Policy Center found 61% of US adults oppose new data centres in their area, up 12 points in four months, and the issue has become a talking point in the midterm elections.^3,4

That gap explains the rush for the “picks and shovels” of power, meaning the companies that supply the essentials. They fall into three groups:

• Power generators that supply electricity around the clock, especially nuclear (Constellation, Vistra, Talen)
• Equipment makers for turbines, transformers and grid kit (GE Vernova, Eaton)
• Behind-the-meter options that bypass grid queues because power is made at the customer’s own site (fuel cells, onsite gas)

Policy is also shifting costs onto the tech giants. Major tech companies have signed the voluntary Ratepayer Protection Pledge, agreeing to build, bring or buy new electricity and pay for grid upgrades.⁵

Explore the sectors connected to energy demand, infrastructure spending and AI development.

The catch: power stocks are sensitive to interest rates

This is where the AI trade meets the bond market. Utilities were the worst-performing sector in the third quarter as rising Treasury yields, which compete with dividend-paying stocks for investors’ money, weighed on the group.⁶ They rebounded on Tuesday 6 October as yields eased from 24-year highs and Google’s nuclear power deal with Constellation Energy lifted power stocks.⁷ In practice, power stocks move on both the AI story and interest rates, so check both before taking a view.

Know why higher borrowing costs can influence utilities, infrastructure projects and AI investment.

Play 2: the oil and gas advantage

Halfway around the world, the Strait of Hormuz is still the market’s pressure point. Iran’s closure of the strait disrupted 20% of global oil supplies and significant volumes of liquefied natural gas (LNG).⁸ Even after April’s ceasefire, ship traffic stayed below pre-war levels.⁹ Flows have recovered since, but not fully: top commodity traders at the Energy Intelligence Forum in London estimated this week that Middle East flows are at around 80% of pre-conflict levels.¹⁰

Traders are pricing in more risk again. Brent, the global oil benchmark, climbed above $101 a barrel this week as Iran intensified attacks on tankers, with nine incidents reported so far this month by UK Maritime Trade Operations.¹⁰

Policymakers are responding, but with less new supply than it sounds. The Group of Seven (G7) major economies agreed on 2 October to release diesel and other emergency stocks. That release forms part of the roughly 100 million barrels still to be delivered from the 400 million barrel International Energy Agency (IEA) release agreed in March, and the IEA said this week that members will not add to that total.¹¹ The EIA projects Brent will average $105 a barrel in the fourth quarter before easing to $84 in 2027, though its forecast was finalised before the G7 announcement.¹²

The US is well placed as an exporter, and its LNG sector is still growing. Export plants ran near peak output in the first half of 2026, but new capacity is expected to lift exports from 17.3 billion cubic feet per day (Bcf/d) in the second half of 2026 to 18.7 Bcf/d in the first half of 2027.¹³ With plants running close to full, long-term supply contracts become more valuable. The gap between Brent and US oil prices (West Texas Intermediate or WTI) is also worth watching: it has widened to around $12 a barrel, close to its widest since May, as Brent reacted more sharply to shipping costs and reduced Gulf flows.¹⁴

Where the two plays meet

Higher energy prices feed inflation. Inflation keeps the Federal Reserve leaning towards higher interest rates,¹⁵ which keeps yields high, and high yields weigh on utilities and on the AI projects funded by debt. America’s power play is a strength, but it also ties energy, rates and tech together. A move in one can quickly hit the others.

Follow oil, natural gas and other commodities affected by changes in global supply and demand.

What to watch

• Tanker incidents in the Strait of Hormuz and Gulf export data⁵
• Treasury yields (the big mover for utilities)
• Power deals from big tech and news on connecting new projects to the grid 

Figures as of 7 October 2026. Past performance is not a reliable indicator of future performance. This content does not constitute investment advice. 

References

1. Reuters, “US power use to beat record highs in 2026 and 2027 as AI use surges, EIA says”, 6 Oct 2026. https://www.spokesman.com/stories/2026/oct/06/us-power-use-to-beat-record-highs-in-2026-and-2027/ (reporting the EIA’s October Short-Term Energy Outlook, https://www.eia.gov/outlooks/steo/)
2. Goldman Sachs Research, “US Data Center Power Demand Projected to Double by 2027”, May 2026. https://www.goldmansachs.com/insights/articles/us-data-center-power-demand-projected-to-double-by-2027
3. Annenberg Public Policy Center, “Opposition to Local Data Centers Rises Sharply, Annenberg Survey Finds”, Aug 2026. https://www.annenbergpublicpolicycenter.org/opposition-to-local-data-centers-rises-sharply/
4. Brookings, “Why data centers are a top issue in the 2026 midterms”. https://www.brookings.edu/articles/why-data-centers-are-a-top-issue-in-the-2026-midterms/ ; Stateline, “Data center backlash set to sway midterm elections”, 12 Oct 2026. https://stateline.org/2026/10/12/data-center-backlash-set-to-sway-midterm-elections
5. Federal Register, “Ratepayer Protection Pledge”, 9 Mar 2026. https://www.federalregister.gov/documents/2026/03/09/2026-04645/ratepayer-protection-pledge ; Data Center Dynamics, “Big tech makes ratepayer protection pledge for data centers at White House” (notes the pledge is non-binding). https://www.datacenterdynamics.com/en/news/big-tech-makes-ratepayer-protection-pledge-at-white-house/
6. Investing Daily, “Energy Roared Back in Q3 as Utilities Fell to Last Place”, Oct 2026. https://investingdaily.com/146819/energy-roared-back-in-q3-as-utilities-fell-to-last-place
7. Benzinga, “S&P 500, Nasdaq Hit Records, Power Stocks Rally on Google’s Nuclear Deal”, 6 Oct 2026. https://www.benzinga.com/markets/equities/26/10/62199369/sp-500-nasdaq-100-record-highs-treasury-yields-ease-stock-market-today ; CNBC, “Stock market news for Oct. 6, 2026”. https://www.cnbc.com/2026/10/05/stock-market-today-live-updates.html
8. Al Jazeera, “Hormuz ship attacks surge: Are increased oil exports sustainable?”, 6 Oct 2026. https://www.aljazeera.com/news/2026/10/6/hormuz-ship-attacks-surge-are-increased-oil-exports-sustainable ; EIA, “U.S. LNG exports rose 23% in the first half of 2026 because of higher capacity”. https://www.eia.gov/todayinenergy/detail.php?id=68064
9. NBC News, “Strait of Hormuz shipping traffic is effectively at a standstill despite Iran ceasefire”, 9 Apr 2026. https://www.nbcnews.com/world/iran/strait-hormuz-shipping-traffic-effectively-standstill-iran-ceasefire-rcna267391 ; CNBC, 22 Apr 2026. https://www.cnbc.com/2026/04/22/iran-war-strait-hormuz-tanker-ship-trump-blockade.html
10. Bloomberg, “Iran Ramps Up Ship Attacks in Hormuz as Oil, Gas Flows Rise”, 7 Oct 2026 (free copy: https://www.insurancejournal.com/news/international/2026/10/07/888260.htm)
11. CNN, “Oil prices jump amid record tanker attacks in Hormuz”, 8 Oct 2026. https://www.cnn.com/2026/10/08/business/oil-diesel-prices-tanker-attacks-hormuz-intl ; OilPrice.com, “Oil Jumps 2% as Iran Steps Up Attacks on Hormuz Tankers”, 8 Oct 2026. https://oilprice.com/Latest-Energy-News/World-News/Oil-Jumps-2-as-Iran-Steps-Up-Attacks-on-Hormuz-Tankers.html
12. EIA, Short-Term Energy Outlook, October 2026. https://www.eia.gov/outlooks/steo/ ; Investing.com, “EIA raises Q4 oil price forecast to $105…” (notes the forecast pre-dates the G7 announcement). https://au.finance.yahoo.com/news/eia-raises-q4-oil-price-114526919.html
13. EIA, “U.S. LNG exports rose 23% in the first half of 2026 because of higher capacity”. https://www.eia.gov/todayinenergy/detail.php?id=68064
14. The National, “Oil prices waver in face of Iran war truce and Houthi attacks”, 25 Sep 2026 (citing Reuters). https://www.thenationalnews.com/business/energy/2026/09/25/oil-prices-waver-in-face-of-iran-war-truce-and-houthi-attacks/ ; Rigzone, “Analysts Look at WTI-Brent Spread”, 1 Oct 2026. https://www.rigzone.com/news/analysts_look_at_wtibrent_spread-01-oct-2026-184747-article/
15. Investrade, “Morning Preview: October 06, 2026”. https://investrade.com/morning-preview-october-06-2026/