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Energy shocks expose statistical blind spots
9/25/2026
The Hormuz crisis has revealed the limitations of traditional energy statistics, telling us much about where energy comes from, but little about how it is used.
Energy statistics rarely make headlines. Sometimes it takes a disrupted shipping lane to expose their blind spots. The Strait of Hormuz crisis has highlighted just how vulnerable oil and LNG trade can be. While electrification has helped cushion the impact, conventional energy statistics offer surprisingly little insight into the extent of that protection, or how resilient the system may be when the next crisis emerges.
The reason is simple. Electric vehicles and heat pumps do more than replace fossil fuels. They also waste less energy and can make demand more flexible, shifting consumption to times when renewable electricity is abundant and cheap. Electric vehicles typically convert 77% or more of their energy into movement, versus 12-30% for petrol cars.[1] Electrification therefore reduces both fossil-fuel use and the energy required to provide the same mobility or heat. Heat pumps can deliver three to five units of heat per unit of electricity, compared with about 0.8 units from a fossil-fuel boiler.
The same journey or the heating of a home can therefore require considerably less energy. Together with losses from transporting fuels, the global energy system is only about 37% efficient.[2] Yet much of the debate still focuses on “primary energy.” This measure includes energy-sector use, where quite some energy is lost as waste heat in engines, boilers and power stations. Electric and renewable technologies can therefore appear less important in the statistics precisely because they waste less energy.[3]
Our Chart of the Week compares two ways of measuring electrification. “Final energy” captures the energy delivered to buildings, vehicles and factories, excluding the energy-sector use. “Useful energy” also takes account of how efficiently that energy is converted into heat, movement or industrial output. On this measure, Europe appears more electrified, and closer to China, than conventional statistics suggest.
This is not an academic distinction. According to energy think tank Ember, the global electric-vehicle fleet avoided oil consumption of around 1.7 million barrels a day in 2025. That was equivalent to about 70% of Iran’s oil exports through the Strait of Hormuz.[4] The solar power capacity added worldwide in 2025 could also significantly reduce gas demand. It could replace enough gas-fired power generation to save roughly as much gas as all the LNG shipped through the Strait of Hormuz in 2025.[5]
Energy reserves and alternative routes can cushion the initial impact of a supply crisis. Electrification changes the underlying dependence. Estimates suggest that greater use of electric vehicles, renewables and heat pumps could reduce fossil-fuel imports by 70% in economies that currently depend on them.[5]
There are, of course, new dependencies. Electrified systems require robust smart grids, storage and charging infrastructure, secure supplies of critical minerals and sufficient manufacturing capacity.
For investors, electrification opens up a broad opportunity set, ranging from grids and storage to building systems, industrial equipment and software. Policy intervention, competition and valuations remain important risks. Inadequate statistics make both the opportunities and the risks harder to assess.
“The International Energy Agency[6] and Eurostat should therefore regularly measure the transition in terms of useful energy,[7]” says Murray Birt, Senior Sustainability Strategist at DWS. He adds: “Policymakers should also incorporate useful energy into targets.[8]” Electrification does more than replace fossil fuels: it also makes more efficient use of each unit of energy. Those who count only units of fuel consumed risk measuring the energy transition very precisely, but getting it wrong.
Sources: DWS Investment GmbH as of 9/21/26; Energy Institute Statistical Review of World Energy 2026; International Energy Agency 2026.
* Useful energy is the energy available to provide services such as heating, cooling, lighting and mobility after losses or inefficiencies in energy using devices or technologies. Final energy is the energy delivered to consumers or businesses before these losses.
This information is subject to change at any time, based upon economic, market and other considerations and should not be construed as a recommendation. Past performance is not indicative of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models that may prove to be incorrect. Alternative investments may be speculative and involve significant risks including illiquidity, heightened potential for loss and lack of transparency. Alternatives are not suitable for all clients.