Hormuz shock accelerates the shift to electricity: Why countries are turning to electrification for energy security

The latest energy shock linked to disruptions around the Strait of Hormuz is strengthening the case for electrification as countries seek to reduce their exposure to imported fossil fuels. The International Energy Agency’s (IEA) “Electrification: Special Report”, released in September 2026, finds that faster adoption of electric technologies could significantly reduce energy import dependence while supporting economic and climate goals.

The report comes as countries reassess energy security after a second major supply shock in five years. According to the IEA, 25 countries have announced new electrification-related policies since February 2026, while sales of electrification technologies have increased particularly in markets exposed to disruptions in energy shipments through the Strait of Hormuz.

Why electrification matters for energy security

Electrification allows countries to replace some oil and gas consumption with electricity, which can be generated from a wider range of domestic or regional energy sources. The IEA says electric cars, motorcycles, trucks and buses already avoid around 2.3 million barrels of oil demand per day.

Under its High Electrification Scenario, this reduction could rise substantially. By 2035, faster electrification could avoid 18 million barrels per day of oil demand, with four-fifths of the reduction occurring in fuel-importing regions. The scenario also estimates that fuel-importing countries could reduce their energy import bills by around $400 billion a year compared with 2025 levels. Against the higher energy prices prevailing in 2026, the savings could exceed $500 billion annually.

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EVs are only part of the shift

Transport offers the largest immediate opportunity. The IEA estimates that around half of oil-based road transport demand could be electrified competitively today. Continued declines in battery costs could increase that potential to more than four-fifths.

But the transition extends beyond vehicles. Around half of global space-heating demand could be electrified competitively, while about 40% of energy consumption in low- and medium-temperature industrial applications could be electrified cost-effectively.

For emerging and developing economies, the opportunities include electric two- and three-wheelers, agricultural water pumps, cooling, cooking and electrification of small businesses and light industry.

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The electricity system must keep up

The shift, however, creates a new infrastructure challenge. Electrifying transport, buildings and industry will increase electricity demand, requiring investment in generation, grids, storage and flexible power systems.

The IEA says grids need to be modernised and expanded 40% faster by 2035 under its High Electrification Scenario. Battery storage capacity would also need to rise sharply to help manage periods of high demand and integrate variable renewable generation.

Electrification also creates new supply-chain risks. Critical minerals such as copper, lithium, cobalt and rare earths are concentrated in certain markets, meaning countries could partly replace dependence on imported fuels with dependence on technology and mineral supply chains.

The IEA's analysis therefore frames electrification not simply as a climate strategy, but increasingly as an energy-security strategy: reducing exposure to oil and gas shocks while building more resilient, diversified electricity systems.

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