Energy Security in a Fragmented World: Implications for Mexico

Energy security has undoubtedly become a central issue in the international debate. For much of the past few decades, globalization allowed energy markets to operate under a relatively integrated logic, where flows of oil, gas, and electricity were primarily driven by economic and commercial considerations. However, recent geopolitical tensions, the reconfiguration of supply chains, and growing strategic competition among major powers have transformed this landscape. In this new context, energy has regained its role as a fundamental element of power and international politics.

A clear example of this shift emerged following Russia’s invasion of Ukraine in 2022. For years, several European countries relied heavily on Russian natural gas to supply both industry and households. Prior to the conflict, Russia accounted for approximately 40% of the European Union’s natural gas consumption. When that relationship became vulnerable due to geopolitical factors, the region was forced to respond quickly by diversifying suppliers, increasing liquefied natural gas (LNG) imports, and accelerating investments in renewable energy. According to the International Energy Agency (IEA), European LNG imports increased by nearly 60% between 2021 and 2023, largely driven by supplies from the United States and other exporters. This episode reminded governments that energy security cannot depend on a single supply channel.

At the same time, the transition toward cleaner energy sources is reshaping the global geopolitical landscape. The electrification of transport, the rapid expansion of solar and wind power, and advances in energy storage technologies are gradually reducing reliance on fossil fuels in certain sectors. According to the IEA, global renewable energy capacity grew by more than 500 gigawatts in 2023, the largest annual increase on record. This momentum reflects a global shift toward more diversified and less carbon-intensive energy systems.

However, this transformation is also creating new strategic dependencies linked to critical minerals, such as lithium, cobalt, nickel, and rare earth elements, which are essential for batteries, wind turbines, and electronic devices. The World Bank estimates that demand for minerals associated with clean energy technologies could increase to sixfold by 2040. The geographic distribution of these resources is uneven and highly concentrated. For example, the Democratic Republic of the Congo produces nearly 70% of the world’s cobalt, while Australia, Chile, and Argentina account for a significant share of global lithium production. In addition, China dominates a large portion of the processing and refining of many of these strategic minerals.

This concentration has prompted advanced economies to develop strategies aimed at diversifying supply sources, strengthening domestic production, and building more resilient supply chains. In the United States, for instance, the passage of the Inflation Reduction Act in 2022 included significant incentives to promote clean technology manufacturing and reduce dependence on foreign strategic inputs. The European Union, for its part, has advanced the Critical Raw Materials Act, aimed at strengthening supply security for key minerals required in the energy transition.

In this evolving international context, Mexico faces a particularly relevant moment. The country holds a strategic position within North America, one of the most integrated energy regions in the world. Energy interdependence between Mexico, the United States, and Canada manifests across multiple dimensions, including hydrocarbon trade, industrial supply chains, and the growing interconnection of energy infrastructure. In the case of natural gas alone, Mexico imports more than 70% of its consumption — primarily from the United States — highlighting the deep integration of regional energy markets.

At the same time, Mexico is part of one of the world’s most important manufacturing platforms. The automotive industry, appliance production, and the increasing digitalization of the economy all require reliable and competitive energy systems. According to Mexico’s Ministry of Economy, the manufacturing sector accounts for approximately 18% of the country’s GDP and depends heavily on stable energy supply to maintain international competitiveness.

In this context, energy security takes on a broader meaning than in the past. It is no longer solely about ensuring fuel supply, but about developing energy systems capable of sustaining economic growth, attracting productive investment, and responding to the challenges of the global energy transition. This requires investment in energy infrastructure, strengthening grid reliability, diversifying generation sources, and maintaining regulatory frameworks that can effectively channel long-term capital.

The growth of electrification and emerging technologies is significantly increasing electricity demand across many economies. Data centers, advanced manufacturing, artificial intelligence, and new energy technologies all require robust and flexible power systems. According to the International Energy Agency, global electricity consumption could increase by nearly 80% by 2050 under accelerated energy transition scenarios. This forecast underscores the importance of proactively planning the expansion of electricity infrastructure.

Energy complementarities among Mexico, the United States, and Canada offer important opportunities to strengthen the entire regional system. The integration of energy markets, joint infrastructure development, and technological exchange can contribute to a more efficient and coordinated energy transition.

At the same time, the nearshoring trend is reshaping global production chains and creating new opportunities for Mexico. Many international companies are seeking to relocate industrial operations closer to the North American market, which could significantly increase demand for reliable energy infrastructure within the country. According to estimates by the Inter-American Development Bank, this relocation process could generate up to US$78 billion in additional exports for Latin America, with a substantial portion likely to be concentrated in Mexico.

Against this backdrop, energy security becomes a central pillar of the country’s economic and geopolitical strategy. Decisions in energy policy have direct implications for Mexico’s ability to attract investment, participate in global value chains, and sustain long-term economic growth. A reliable and, above all, diversified energy system constitutes a fundamental foundation for any development strategy in an increasingly competitive world.

The global energy debate is therefore at a turning point. The world is moving simultaneously toward a more electrified economy and a more complex geopolitical environment. For Mexico, understanding and navigating this dual transformation will be essential.