Beyond the Barrel: How Electrification Became the World's New Energy Security Strategy

In the summer of 2026, a crisis in the Strait of Hormuz did what decades of climate diplomacy had struggled to do: it put energy security back at the centre of the conversation about how fast the world should electrify. Tankers rerouted, insurers repriced risk, and governments that import most of their oil and gas found themselves recalculating, in real time, just how exposed they were to a single chokepoint of water. It was in that context — not in the abstract, but in the middle of an actual shock — that the International Energy Agency was asked by Türkiye, holder of the COP31 presidency, and Australia, president of the COP31 negotiations, to produce a special report on where the world's rapid shift toward electricity actually stands, and what it would take to go further. The result, Electrification 2026, was released on 22 September 2026 and discussed the same day at an IEA-COP31 High-Level Energy Transition Dialogue. Its central argument is that electrification has quietly become one of the few tools available to governments that both cuts emissions and reduces exposure to the kind of shock the Strait of Hormuz just delivered. This piece goes deep on that argument, using the IEA's own figures, because it is the part of the report that speaks most directly to the anxieties of the moment: is switching to electricity actually making the world's energy system safer, and if so, what new risks is it introducing in the process.

The Oil Already Being Displaced

The IEA's starting point is a number that is easy to miss because it describes something that has already happened rather than something projected. Electric cars, motorcycles, trucks and buses now in use around the world are avoiding roughly 2.3 million barrels of oil demand every single day. The IEA offers a strikingly concrete way to picture that figure: it is larger than the volume of oil that was rerouted around the Strait of Hormuz via the United Arab Emirates' Habshan-Fujairah pipeline during the summer 2026 crisis. In other words, the electrification that has already occurred — largely for reasons of cost, air quality and consumer preference rather than geopolitical strategy — is now functioning as a bigger bypass valve for oil-supply risk than the physical pipeline infrastructure built for exactly that purpose. That is not a projection or a modelled scenario. It is, according to the report, the current state of the global vehicle fleet as it exists in 2026.

From that current baseline, the report lays out two distinct futures, and the gap between them is the real subject of this piece. Under what the IEA calls its Stated Policies Scenario — essentially, the trajectory the world is on if governments do no more than what they have already committed to — electric cars are set to reach around half of global new car sales by 2035, up from about a quarter today, itself a jump from under one percent in 2015. On that path, electric vehicles alone would remove approximately 10 million barrels of oil demand per day by 2035, a volume the IEA compares to the entirety of Russia's current oil production. That is the outcome of inertia: policies already on the books, extrapolated forward.

The second pathway is what the IEA calls the High Electrification Scenario, built around the "35-by-35" target now under discussion at COP31 — raising electricity's share of final global energy consumption from 23% today to 35% by 2035, a level the agency's modelling suggests is cost-effective under 2025 technology prices without heroic assumptions about further cost declines. Under this more ambitious pathway, electric vehicles would avoid around 18 million barrels of oil demand per day by 2035, with roughly four-fifths of that reduction concentrated in countries that import their fuel rather than export it. The financial consequence, in the IEA's accounting, is substantial: fuel-importing nations could cut their annual energy import bills by close to a quarter relative to 2025 levels, worth about USD 400 billion a year at 2025 prices, or more than USD 500 billion a year measured against the higher energy prices seen in 2026. For finance ministries in Europe, Japan, Korea, India and much of Southeast Asia — economies that import the bulk of the oil and gas they burn — that is not a marginal climate co-benefit. It is a balance-of-payments story.

A New Kind of Risk: Electricity Security

It would be a mistake, though, to read the report as a simple case that more electrification equals more safety, full stop. The IEA is explicit that a system built around electricity swaps one category of energy security risk for a different one, and the report spends an entire subsection, "Electricity security," working through what that new risk profile looks like. The core tension is speed. To hit the High Electrification Scenario, global electricity demand needs to grow by around 1,400 terawatt-hours a year through 2035 — nearly double the pace of growth seen over the past decade, a decade in which demand already grew more than three percent annually, roughly twice as fast as overall energy demand. Feeding that growth safely, the IEA argues, requires grids to expand 40% faster than they did over the past ten years. The warning attached to that figure is blunt: delays in grid build-out would show up as longer queues for new connections, more congestion, more curtailment of generation that is ready but cannot get to market, and rising risk to reliability more broadly. Annual investment in grids has already climbed from USD 315 billion in 2015 to USD 450 billion in 2025, and the report's own numbers imply that pace needs to keep accelerating, not plateau.

Storage is the other half of that equation, and the scale of what the IEA says is required is worth sitting with. On the pathway consistent with global net-zero goals, battery storage capacity needs to grow nearly tenfold, from levels already around 100 gigawatts of new capacity added annually in 2025 — itself roughly a hundred times higher than in 2015 — to approximately 2,900 gigawatts of total capacity by 2035. That storage, paired with demand-response measures that shift vehicle charging, heating, cooling and industrial processes away from peak hours, is what the report says has to develop in lockstep with generation and grids if electrification is not simply to relocate today's oil-security anxieties onto tomorrow's electricity system. As the report puts it, secure, reliable and affordable electrification requires low-emissions generation, grids, digital capabilities, storage and other flexibility options to develop together — not in sequence, and not with one lagging badly behind the others.

The Cybersecurity Blind Spot

Then there is a risk category that has no real analogue in the oil-and-gas era: the cybersecurity of a much more digitally connected energy system. A barrel of oil sitting in a tanker or a storage tank cannot be hacked. A grid full of smart chargers, connected heat pumps, remotely managed batteries and digitally dispatched industrial load increasingly can be, at least in principle, and the report flags this directly, noting that the potential for remote control of digitally connected energy assets is itself a source of risk that makes cybersecurity safeguards a first-order concern rather than an afterthought. This is presented as a genuinely new feature of the energy security landscape, one that has no equivalent in a system organised around physical fuel logistics.

Critical Minerals: Trading One Dependency for Another

The report's treatment of critical minerals adds a further layer of nuance that is easy to lose in a headline about oil-demand avoidance. Batteries and a number of other electrification technologies depend on critical minerals whose supply chains are, in the IEA's words, characterised by high levels of geographical concentration. That is a real vulnerability, and the report does not minimise it: it explicitly calls for diversified supply chains and a level playing field as one of its recommended actions for governments. But it also draws a structural distinction that is central to the whole argument of the chapter. A disruption to a fuel supply chain stops the equipment that depends on it from functioning, more or less immediately — an oil tanker that cannot reach a refinery means fuel that does not reach a pump. A disruption to a battery or solar panel supply chain does not switch off the electric cars, heat pumps or wind turbines already installed and running; it only constrains how quickly new capacity can be deployed. That is a meaningfully different kind of exposure — a drag on future growth rather than an immediate operational failure — even though it is still, in the report's own framing, a vulnerability that needs active management rather than one that can be assumed away. The report also notes, almost in passing, that electrification technologies increasingly overlap with artificial intelligence, robotics and advanced manufacturing, meaning that building domestic capacity in batteries, power electronics and grid equipment carries strategic value that extends well beyond the electricity sector itself.

Winners and Losers: Importers vs. Exporters

Geography matters enormously to how this all plays out, and the IEA is careful not to flatten the story into a single global number. Energy importers stand to gain the most from electrification, precisely because they are the ones currently paying for fuel they do not produce. The report calculates that tapping the full economically viable potential for electrification in Europe would lift the region's electrification rate by close to 15 percentage points — the largest gain of any region assessed. The Middle East, by contrast, a net energy exporter where many consumers pay artificially low domestic energy prices, would see a gain of only around 5 percentage points from the same kind of push, reflecting a much weaker built-in economic incentive. That does not mean exporting economies have no stake in the transition; the report argues they have a different one, framing electrification as an opportunity to develop domestic renewable resources and nuclear power, improve efficiency, and gradually rationalise energy pricing that currently masks the true cost of consumption. It is a lower-urgency case, but not a nonexistent one.

The Access Gap This Pathway Doesn't Fix

The unevenness becomes starker still once the report turns to countries that are not debating how to optimise an already-electrified system but are still working to build one in the first place. Around 730 million people worldwide still lack access to electricity altogether. Per-capita electricity consumption in sub-Saharan Africa averages roughly 200 kilowatt-hours a year, against about 7,000 kilowatt-hours in advanced economies and China — a gap of thirty-five to one that no amount of electric-vehicle policy in Europe will close. Africa's overall electrification rate, at around 12% of final energy consumption, has risen by only about two percentage points since 2000, even as Japan and Korea sit near 33% and China has climbed to roughly 30%. For these economies, the report's framing shifts: the priority is not incremental gains in electric heating or transport but expanding basic access and supporting productive uses of electricity in agriculture and manufacturing — the foundation on which any later electrification of transport or industry would eventually be built. Encouragingly, the report does point to genuine momentum in parts of the developing world: electric vehicle sales in Southeast Asia rose by around 10 percentage points as a share of the market in the first half of 2026 alone, bringing the region roughly into line with Europe's adoption levels, driven partly by dense cities where daily commutes fit comfortably within the range of the electric two- and three-wheelers already on the market, and partly by the added incentive of chronically poor urban air quality.

Who Pays, and Who Builds It

None of this security architecture is free, and the report is unusually direct about the bill. By its own accounting, 2026 will see around USD 2 trillion spent globally on electrification in the broadest sense — electricity supply and grids account for roughly USD 1.6 trillion of that, with the remaining USD 400 billion going toward end-use equipment such as electric vehicles, heat pumps and industrial electrification. Under the High Electrification Scenario, spending on that end-use side alone needs to roughly triple, to around USD 1 trillion a year by 2035. That is, in effect, the price tag attached to the energy security benefits described above: the import-bill savings and oil-avoidance figures do not materialise without a parallel, and much larger, wave of capital spending on the demand side of the system. The report frames this as broadly self-financing over time, pointing out that average household energy bills are projected to fall by around 15% by 2035 under the High Electrification Scenario, since electric vehicles run at roughly three times the efficiency of combustion engines and heat pumps deliver even larger efficiency gains over the gas or oil boilers they replace. But it does not pretend the up-front burden is evenly distributed. Large one-time purchases — a vehicle, a heat pump, an induction stove — are precisely the kind of cost that lower-income households struggle to finance even when the running-cost savings are clear, which is why the report's recommended actions single out targeted support for up-front investment barriers as a distinct priority rather than an assumption that markets will sort it out on their own. There is a labour dimension to this build-out as well: the electricity sector is already the largest employer in the global energy industry, with employment growth since 2019 outpacing both the wider energy sector and the broader economy, and the report notes that some labour markets are already reporting shortages of the electricians, welders and grid line workers needed to build and maintain the infrastructure this chapter describes. Under the High Electrification Scenario, employment in electrification-related roles could roughly double from current levels — which is as much a constraint to plan around as it is a benefit to celebrate, given how specific and currently scarce those skills are.

The Policy Gap COP31 Has to Close

All of this leaves the report with an uncomfortable arithmetic problem, one it does not try to soften. Under current policy settings — the Stated Policies Scenario described earlier — global electrification rises to only around 30% by 2035, falling short of the 35% goal now being discussed at COP31, despite the fact that the IEA's own cost analysis suggests roughly 33% is already achievable today on economic grounds alone using 2025 technology and prices. The gap between what is cost-effective and what current policy actually delivers is, in the report's own logic, the real story: it is not primarily a technology problem or a cost problem, but a policy and financing one. The report's ten recommended actions read accordingly less like a wish list and more like a checklist for closing that specific gap — building cross-sectoral electrification strategies rather than treating supply and demand separately, tackling the up-front cost barrier that keeps lower-income households locked into cheaper-to-buy but more expensive-to-run fossil fuel equipment, correcting energy price distortions that still subsidise the fuels electrification is meant to displace, and explicitly building the diversified critical-mineral supply chains and the grid, storage and cybersecurity readiness this piece has traced through the report's energy security chapter. A small number of governments are already moving: France's 2026 plan aims to raise its electrification rate from 27% in 2023 to 38% by 2035; Canada launched a National Strategy for an Electrified Economy in May 2026; and the European Commission's Electrification Action Plan, published in July 2026, sets an indicative target of 46% by 2040. Whether enough other governments follow, in the shadow of the very shock that prompted this report, is the question the IEA has now put squarely in front of the COP31 negotiating table.

Why It Matters

The electrification story reads very differently depending on where you live. If you're in Europe, it's about insulating yourself from oil shocks and cutting bills. If you're one of the 730 million people with no electricity access at all, mostly in Sub-Saharan Africa, this entire conversation about EVs and heat pumps is happening several steps ahead of you. Any serious climate strategy has to hold both realities at once — otherwise "energy security" just becomes another advantage that compounds for the countries that already have it.