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Geopolitical Realignments for Energy Security

May 28, 2022 | Expert Insights

Energy has been the principal driver of the modern industrialised world . It is hardly surprising that the gargantuan appetite for energy resources has been at the core of geopolitical tensions. Every aspect of  the energy supply chain – as to  who produces it, who controls it and who is the ultimate consumer - has been bitterly contested in corporate boardrooms and in battlefields across the world. 

The war in Ukraine and the monopoly enjoyed by Russia on the energy demands of Europe, have been  brought to the fore as never before.  The route to energy independence affects super  power rivalry , just like every energy architecture   in the world has largely  been built around existing centres of influence 

The same power dynamics will come into sway  once the efforts to find alternates to fossil fuel have been successfully formulated  and made commercially available.


Energy remains a constant factor in all calculations related to the prosperity and growth of any nation state.  For developed countries it is undeniably a means to retain their high quality of life that their citizens have got accustomed to while for nations like China and India, it is the foundation on which they can better the lives of their billions and hope to compete with the richer nations. Then there are nations who for almost a quarter of a century have been at the centre of the oil industry and their countries have grown rich on oil surpluses. A paradigm shift to renewables will most likely be a catastrophic to  their national destiny.

The oil and gas import dependency of different countries is explained by Mr Nobuo Tanaka in very clear terms (Refer chart attached) 



The blue area shows importer of both oil and gas, while green area denotes countries that are both exporter of oil and gas. China, India, Europe, Japan, Korea are importing more and more and are destined to get even more dependent.  On the other hand, the U.S. is moving from a net importer of gas and oil to a net exporter, thus joining Russia and the Middle East. This move will result in the U.S. interests being more aligned towards the exporters vis a vis the importers. This was seen very clearly during the pandemic when the U.S., Russia and Saudi Arabia came together to reduce oil / gas productions.

The net importers- China, Europe, Japan, Korea, and India- have no option but to look towards renewable energy to reduce the stranglehold of oil / gas producers . Therefore, renewables are now driving energy strategies with a national security connotation. The icing on the cake being that focus on renewable energy will  ensure a more sustainable climate policy narrative.  The natural fallout of this directional change should be a coming together of such like countries to create energy security and sustainability jointly, relative to oil/ gas producers.

Under these competing compulsions, there are bound to be security risks which have to be tackled amicably.  While the world remains largely dependent upon the Middle East oil, the stability of that region remains a paramount concern, even though the dependence is on a decline. Similarly, newer concerns, like critical metals and minerals are emerging, most which have a bearing upon renewables. New rivalries raise their head as nations compete to garner these resources in underdeveloped parts of the globe.

The International Energy Agency believes that energy security is moving away from oil to more renewables. In fact, we may see a greater balance between the two types of energy as comprehensive energy supply strategies are being conceptualised. IEA’s ambitious goal of ‘net zero’ by 2050 is unachievable unless there is international collaboration. Mr Nobuo Tanaka says, “If international collaboration cannot happen, we cannot achieve net zero by 2050, it will take much, much longer time to reach there. So, priority of action, of international collaboration is very important.”


As we transit from a phase of total dependence upon oil/ gas energy to a combination of fossil energy and renewable, the nature of interdependence and geopolitical linkages to energy may witness some changes, albeit not too drastic at this early stage.

Take for example electrification which is a big part of the future. Electricity is a local issue, it's easily generatable and there are myriad sources for this. So, you don't necessarily have that challenge in the product. But what has effectively happened is that it has spread the challenge and the risk to both the demand side as well as the supply side. The supply-side would-be things like supply of critical minerals, whether it's lithium or cobalt or rare Earth. This is creating new power centres, new centres of concern, as well as opportunities for various countries in the world.

There will be challenges when countries like China occupy a dominant position in the renewable energy sector through its monopoly over critical minerals and items like solar panels. The sensitivity of this control will impact globally, if China or any other controlling nations, chose to increase prices by 10 to 20 per cent or more. Electricity charges world over will experience a surge consequently, as the dependence on renewable energy products from China increases.

This potential shift has been fuelling the technology race. Europeans, in particular see great opportunities that can be created to take the lead as the technology provider. This has also spurred the desire to create global partnerships. The interest in India is growing as India may see a 70 per cent of the energy growth of the world and a tripling of the energy consumption from present levels.

Net-zero does not mean zero oil and gas. What it means is that there may be fewer investments in over the year. This means more concentration of oil and gas in fewer areas. This has its own reverberations in various sectors, like aviation. There will be a major shift akin to what was experienced when t increased U.S. shale oil supply depressed global oil markets.  

Hydrogen suddenly introduces a whole new set of opportunities and shifts. Granted, we must solve some of the challenges, but in theory, it is true energy independence. It allows every country to suggests a combination of renewable sources, bioresources, and hydrogen generation.  

There is a strong possibility that energy independence will be based upon renewable energy and hydrogen.  It is the practical application of this idea which will require collaboration amongst nations- to share technology, finances, brains, and resources as no single country has all the answers and the means. 

New trading rules are being introduced that could generate protectionism by raising carbon related barriers, a sort of border taxes.  EU has already introduced its Carbon Border Adjustment Mechanism (CBAM) that portends to create a huge problem for the Global South.



  • We believe that  there will be a  shift in the balance of power between countries as you move from one set of industries to another. This  will play out on the global scale. 
  • The  shift in power equations  poses a dilemma for emerging economies like India and Brazil if they are left out of the ‘coalition of the rich and powerful’.  They must take the initiative to cobble energy coalitions in the Indo Pacific and stretch it  all the way to Africa and Latin America. 
  • India has also  created  a company called Kabil, which will look for critical minerals. But we are presently  behind the rest of the world.