What will it take to finance energy security, transition and resilience in a changing world?

The ongoing crisis in the Middle East has sharply curtailed flows through the Strait of Hormuz, which typically carries around 20% of global petroleum liquids consumption and liquefied natural gas (LNG) exports. International markets have taken a hit, as global supply losses surpassed the combined shortfalls seen during both the oil crises of the 1970s and the market disruption following Russia’s invasion of Ukraine in 2022. 

Risks to energy security have been further exacerbated by disruptions in and around the Bab el-Mandeb Strait, another critical shipping route linking the Red Sea and the Gulf of Aden. Together, these developments highlight the vulnerability of global energy markets to disruptions affecting a small number of strategically important maritime corridors.

These events have exposed a crucial vulnerability: many economies remain heavily dependent on fossil fuels, whose prices can be determined by events far beyond their borders.

In Southeast Asia, 60% of crude oil imports, and almost half of the oil products refined or consumed in the region come from the Middle East, exposing energy systems to unprecedented disruptions. In Europe, despite only 7% of LNG inflows in 2025 coming via the Strait of Hormuz, disruptions still pushed the gas price sharply higher: by end-August 2026, the benchmark wholesale Dutch Title Transfer Facility prices stood 130% above pre-war levels.

The economic consequences are also substantial. The energy crisis following Russia’s invasion of Ukraine saw global energy prices triple between 2020 and 2022, prompting OECD economies to spend around  0.7% of gross domestic product to shield households and businesses from the shock.  Additionally, recent OECD research shows that the evolving conflict in the Middle East has become the dominant force shaping global economic prospects, prompting an energy shock that is driving inflationary pressures and is projected to have adverse impacts on growth worldwide.

This year’s crisis highlights that energy security and economic security are inseparable. In many countries, the most durable path to both lies in accelerating electrification and clean energy deployment.  

Electrification is the most direct route to reducing fossil-fuel dependence. Electric vehicles, heat pumps and electric industrial processes are significantly more energy efficient than fossil-fuel alternatives, particularly when powered with renewable energy. Sweden and Norway have built globally competitive industrial sectors around abundant low-carbon electricity, while reducing exposure to fuel-price volatility and maintaining strong export performance. In China, between 2015 and 2023 fossil-fuel use in final energy consumption across buildings, transport and industry fell by 1.7%, while electricity use increased by 65%.

As economies electrify, power systems become increasingly strategic assets. Investment in transmission and distribution networks, electricity storage, demand response and other flexibility solutions is essential to ensure reliable electricity supply, integrate growing shares of renewables and accommodate rising demand from transport, industry and digital technologies. Denmark, for instance, has developed strong grid capacity, interconnections with neighbouring countries, and, over the past ten years, a power supply security of 99.99% and a share of 88% of renewable electricity.

Renewable energy is increasingly a security imperative. Wind, solar and other renewables reduce exposure to fuel price spikes, diversify energy supply and strengthen domestic electricity generation. As demonstrated during Europe’s recent energy crises, renewables help reduce reliance on imported fuels and cushion economies against fossil fuel price shocks. Globally, installed renewable power helped avoid an estimated USD 480 billion in fossil-fuel costs in 2025.

Perhaps the most overlooked energy-security measure is also often the cheapest. Improving the efficiency of buildings, appliances, transport systems and industrial processes reduces energy demand, lowers energy bills and decreases import dependence. In IEA countries, efficiency gains since 2000 have avoided roughly 20% more fossil-fuel imports. Energy efficiency remains one of the most effective tools available to governments seeking to enhance resilience and limit economic disruption, while providing a profitable investment opportunity for corporates and financial institutions. 

The European Commission highlights the scale of the opportunity. Increasing electricity’s share of EU final energy consumption from 23% today to 46% by 2040 could reduce imports of gas by more than 70% and crude oil imports by more than 40%, lowering the EU’s fossil fuel import bill by EUR 260 billion. Similar benefits could be achieved in many other regions. Reflecting this potential, the COP31 Presidency (Türkiye and Australia) has launched a “35 by 35 target”, which aims to increase electricity's share of global final energy consumption from roughly 20% today to 35% by 2035.  

The good news is that the technologies needed to strengthen energy security already exist and are becoming more affordable every year. The challenge now is to scale investment and align policies accordingly. This agenda does not require governments to fund the transition by themselves. Over the past fifteen years, OECD analysis has focused on the practical conditions needed to unlock renewable energy, energy efficiency, power grids and industry decarbonisation. This includes stronger enabling policy frameworks, credible project pipelines, risk-sharing instruments, deeper local capital markets that facilitate investment and financing in local currency. Well-prepared public-private partnerships can also help finance clean energy while preserving government oversight of strategic infrastructure. The policy challenge is not only to spend more public money, but to use scarce public resources strategically to crowd in private finance. 

These themes will be central to discussions at the 13th OECD Green Finance and Investment Forum, taking place in Paris and online on 7-8 October 2026.  The event will provide a unique opportunity for public and private sector decision-makers to exchange experiences, identify practical solutions and build collective momentum toward more secure and competitive energy systems. In an increasingly uncertain world, green finance and investment in clean energy are not only about reducing emissions. They are about reducing risk and building economic resilience. 

This blog benefited from valuable inputs and comments from Geraldine Ang, Valentina Bellesi, Yuval Laster, Eleonora Moro, Felicitas Murat, Deger Saygin and Robert Youngman.

It contributes to the theme of the 13th OECD Forum on Green Finance and Investment, and to the High-Level Plenary, “Financing the Electrification of the Global Economy: A Pathway to Lasting Energy Security”, being developed jointly by the OECD CEFIM Energy and Industry teams.