Infrastructure operating within critical systems is becoming a strategic cornerstone for portfolios.
There are moments when the operating environment for an asset class shifts significantly. The first quarter of 2026 was one of those moments. The combination of an active military conflict in the Middle East, an energy supply shock of a scale not seen since the 1970s and the elevated level of concentration within public markets has reshaped the role private infrastructure can play in a portfolio from diversifier to strategic cornerstone. The case for the asset class has become more legible – and the demands it places on fund managers have become more exacting – than at any point in its institutional history.
In this article, we set out how we are thinking about that environment: what has changed, what the implications are for the physical systems companies operate within, and how the structural forces we have been tracking for over a year are now playing out in observable ways.
The energy shock – and the cascade beneath it
Most commentary on the conflict in Iran has treated it as an oil price story. It is not, or at least it is not only that.
The disruption to the Strait of Hormuz – through which approximately 20% of global oil consumption and a comparable share of LNG trade normally transits – has exposed a set of cascading vulnerabilities in the global supply chain that reach far beyond the price of crude, and that will persist long after any ceasefire restores navigation.
The cascade works as follows. Oil is upstream of liquefied natural gas, which feeds nitrogen fertilizer production, which in turn feeds food security across South and Southeast Asia. Oil is also upstream of sulphur, which feeds phosphate production, which in turn feeds a different branch of the fertilizer chain. Oil is upstream of the Gulf petrochemical complex, which supplies the feedstocks for plastics, resins, and the industrial chemicals that manufacturing supply chains treat as ambient – present until suddenly absent. And oil is upstream of helium, a by-product of natural gas extraction, for which there is no substitute in semiconductor fabrication, fibre optic production, and MRI equipment.
Exhibit 1: Oil and the downstream products
Source: Cambell Ramble, “The Cascade” (March 29, 2026); RBC GAM analysis
The analyst community at Campbell Ramble , a substack published by Alexander Campbell, the former head of commodities at Bridgewater Associates and founder of Rose.ai, captured this architecture precisely in late March: "Most people still think Hormuz is an oil story. It's not. Oil is node one. The damage is downstream."
Their observation that 200 helium containers were stranded in the Gulf at the start of the conflict – each holding 41,000 litres cooled to within four degrees of absolute zero, with 35 to 48 days of insulation before venting permanently to atmosphere – is the kind of physical specificity that makes the cascade legible. This is not a financial abstraction. It is a physical system failing in sequence.
How is this shock different?
What makes the 2026 shock structurally different from its predecessors is the absence of a cushion. COVID's supply shock was OPEC’s response to simultaneous demand destruction – oil collapsed because nobody was driving. The 2022 Russia-Ukraine energy supply shock coincided with strong post-pandemic demand but was mitigated by alternative buyers for Russian energy and alternative fertilizer supply chains. In 2026, the economy was operating normally before the conflict began. Employment was full and demand was intact. The supply shock of 10-15% across energy, fertilizer, chemicals, metals, and specialty gases has landed against an economy with nowhere to absorb it quietly. The U.S. Strategic Petroleum Reserve, drawn down by the prior administration to manage domestic inflation rather than preserved for a geopolitical emergency, entered this crisis at historically low levels – the buffer is thinner than it has been in decades.
"Most people still think Hormuz is an oil story. It's not. Oil is node one. The damage is downstream."
RBC GAM's own modelling, published in the Spring 2026 Global Investment Outlook , characterizes the inflation impact as a temporary surge of 0.5 to 1.5 percentage points in headline inflation, with the expectation that it unwinds as energy flows normalize. That is a reasonable base case for the oil price channel. It is less clearly applicable to the structural damage: Qatar's main LNG liquefaction complex, partially damaged in the conflict, is estimated to require three to five years to fully rebuild – regardless of when the Strait reopens. Physical infrastructure destroyed in a conflict is not restored by a ceasefire. The cascade has a longer tail than the conflict that triggered it.
Implications for infrastructure investors
For infrastructure investors, the implications are specific. Companies that operate within the connected ecosystem of critical systems – regulated transmission, essential utilities, contracted generation – gain structural value in this environment. Companies that are downstream of affordability stress – consumer-facing toll roads, airport retail, household utility bills – face a constraint that does not resolve when the oil price normalizes. And the conflict has introduced a consideration that was absent from most underwriting frameworks 18 months ago: the targeting of energy and civilian infrastructure as a deliberate instrument of conflict. Craig Tindale, a private investor and author of the white paper “"Critical Materials: A Strategic Analysis”, provided an analysis of the Trump administration's approach to Iran's electrical infrastructure that makes this point bluntly – the threat to grid assets is no longer hypothetical. It is a live dimension of modern conflict, and it will remain a feature of the geopolitical environment regardless of how the current conflict resolves.
What the Hormuz disruption has revealed is not a new vulnerability but a latent one: that physical systems assumed frictionless flows that should no longer be taken for granted.