From petrocurrencies to green currencies: which wins in the renewable energy era?

The 2026 Iran War and the resulting disruption of energy flows through the Strait of Hormuz has hastened a transition that was already underway.

With approximately 20% of global oil and liquified natural gas (LNG) supply disrupted, oil prices rose above $120 per barrel and global energy prices are projected to increase by roughly 24% during 2026.¹

What began as an energy security crisis is increasingly becoming a catalyst for faster investment in renewable energy, energy storage, and electrification.

The economic case for renewable energy has strengthened considerably. Higher fossil fuel costs, greater supply chain uncertainty, and a growing desire among governments to reduce external energy dependence have increased the attractiveness of domestic renewable generation. As a result, global energy-transition investment reached approximately $2.3 trillion in 2025, while more than twenty countries accelerated renewable development initiatives following the energy shock.²

Growth expectations for the renewable energy sector remain substantial. While the absolute value of fossil fuel production and consumption continues to rise globally (to 103 million barrels of oil per day, 568 billion cubic meters of LNG, and 9.2 gigatons of coal in 2025)³, renewables are capturing an ever-growing share of energy consumption. This growth is particularly visible in the electric power sector, where renewables now account for the vast majority of new capacity additions globally, reaching 85-90% in recent years.⁴

According to the International Energy Agency (IEA), annual renewable capacity additions are expected to increase from 683 gigawatts (GW) in 2024 to nearly 890 GW by 2030⁹, with solar and wind accounting for 96% of new capacity additions. Global renewable power capacity is projected to expand by nearly 4,600 GW between 2025 and 2030, approximately double the pace of deployment seen during the previous five-year period.⁵

Further, from a power generation perspective, renewables (particularly solar and wind) have the lowest marginal cost on a $/MWh basis which makes them the most cost-competitive form of new-build power generation. This solidifies a trend that has been in place since 2011, when both solar and wind energy generation first fell below natural gas power on a $/MWh basis.⁶

Which currencies benefit most from these trends?  What makes a currency a potential winner?

In past decades, the currencies of countries with large endowments of oil resources and the ability to get these resources to market – either via domestic or multinational firms and/or partnerships became known as ‘petrocurrencies.’ Many such economies became net energy exporters to leading economies such as the US and Japan. 

As energy supply and demand drivers evolve, future currency performance is likely to be influenced less by traditional oil production and increasingly by three factors that will characterize ‘Green Currencies:’

1. Critical minerals endowment
2. Pace of the country’s domestic energy transition
3. The country’s ability to attract energy transition-related foreign direct investment (FDI)

As we examine these factors further we are excluding USD, EUR, and CNY, as the size and scale of their economies obfuscates the ability to isolate and observe the impact of sustainability and other ‘green’ factors. Further, this article does not address oil export-focused economies that would likely lose the most from the energy transition; the importance of their predicament notwithstanding.

1. Critical Minerals Endowment

As stated in the 2Q 2026 BBH Mind on the Markets Quarterly, a country’s commodity leverage – control of strategic commodities linked to energy, defense, and the AI sector – can strengthen its currency, helping to make it ‘anti-fragile.'⁹

Resource endowment alone, however, does not position currencies as ‘Green Currency’ winners; in order to win, the respective economies must also position themselves into strategically important parts of sustainable energy supply chains.

Clean energy technologies require significant quantities of lithium, copper, nickel, rare earth elements, graphite, and other materials. A high geographic concentration of these key minerals supports an economy’s terms of trade, or economic competitiveness and wealth.

Economies that control major reserves or production capacity may benefit from stronger export revenues and capital inflows. Figure 1 shows endowment, or mined supply of energy transition metals by dominant countries. Figure 2 details the predominant countries of ownership and location of refining production for key minerals.

Excluding China from Figure 2, other economies are endowed with critical minerals and play a lead role in bringing them to market globally through refining production. As such, their currencies have a Green Currency attribute and are poised to benefit from growing future demand of these minerals:

• Australian Dollar (AUD): Australia is the leading supplier of rare earth elements and cobalt, after China.
• Chilean Peso (CLP): Chile is a leading global producer and exporter of both lithium and copper.
• Indonesian Rupiah (IDR): Indonesia occupies a critical position in both the supply and production of nickel globally.

2. Pace of the country’s domestic energy transition:

Accelerating the transition to renewable energy can stimulate a domestic economy by promoting growth in new sectors. It can also shift an economy’s energy dependence to a state of self-sufficiency.

As global energy demands continue to grow, regional conflicts and their impact on energy supply chain security have renewed focus on energy independence. One can look to the experience of South Korea, where its government resorted to extraordinary fiscal stimulus in March 2026 (of approximately 1% of GDP) to mitigate the shock caused by disruptions to energy supplies from the Iran war. South Korea is the world’s fifth largest net importer of energy after China, the US, India, and Japan.⁸

Countries that can reduce reliance on imported fossil fuels through renewable or clean energy generation may improve their trade balances and become less vulnerable to future energy shocks.

We thus view the following currencies favorably from a Green Currency:

• Danish Krone (DKK): Denmark sourced 88% of its power from renewable energy sources in 2024, with a goal of 100% by 2030.⁹
• Norwegian Krone (NOK): Norway is unique in that it scores among the top three economies globally in two important categories: first, it has a high rate of electrification, with electricity supplying approximately 56% of its total energy, and second, its renewables penetration is significant, with renewables supplying over 70% of its energy needs.¹⁰
• Indian Rupee (INR):  Economies that demonstrate the ability to shift their energy balance toward independence and reduce their reliance on external sources of energy will be in a stronger economic position in the future. India has successfully demonstrated this capability, by increasing its avoidance of fuel imports at a more consistent rate than the US, China and others since the early 2000s, through the use of renewables (Figure 3).

3. Ability to Attract Energy Transition-Related Foreign Direct Investment (FDI):

Capital is increasingly flowing toward renewable infrastructure, battery development, grid modernization, and enhancement of critical mineral supply chains.

The ability to capture a portion of global investment capital flowing toward such projects would be supportive a country’s currency as flows into these sectors are trending upward.

Countries that prioritize sustainability-linked sectors in their domestic economies or taking a place in the global energy transition are poised to benefit. Industrial policy plays a key role, where governments may overtly drive their economies’ energy transitions.

Representative Green Currencies viewed favorably due to their potential for attracting investment related to the broader, global energy transition include:

• Australian Dollar (AUD): Australian Dollar (AUD): Has dedicated $2.7 billion to a critical minerals facility for domestic mining and processing projects. Its longer-term strategy, according to Stockholm Environment Institute (SEI) research group, is to deepen technology and skills investment for critical minerals supply chains with the US.¹¹
• Chilean Peso (CLP): Government-backed lithium expansion strategy builds on aspects of previous industrial policies supporting its copper industry, including state majority control with public-private partnerships for new exploration, as well as royalty reforms to balance fiscal revenues with competitiveness and market predictability.¹²
• Indonesian Rupiah (IDR): Since 2022, Chinese firms have announced $15 billion in foreign direct investment (FDI) projects in Indonesia, mostly related to nickel. South Korea and Taiwan have also made battery-related investments in Indonesia.¹³ Indonesia has also banned exports of bauxite ore to protect its bauxite processing and refining industry.¹⁴

Conclusion

The most significant consequence of the Iran energy shock may not be higher oil prices, but rather a faster global shift toward alternative energy sources.

As renewable deployment accelerates, countries with exposure to critical minerals, strong renewable-energy investment prospects, and pathways toward greater energy independence appear best positioned to benefit.

Conversely, economies whose growth models remain heavily dependent on fossil fuel production or carbon-intensive infrastructure could face increasing structural headwinds.

While these trends are likely to unfold over decades, recent geopolitical events may be accelerating their influence on currency valuations today. The trends described in this article will most likely usher in new economic winners, whose currencies will appreciate as the energy transition advances.