The imperative of energy security is becoming more critical to a country’s foreign policy. Prolonged wars in Europe and Asia and great powers' intervention in these wars and competitions for power among them in various regions have raised uncertainties as regards the supply and procurement of natural resources such as oil and natural gas in the globalised market. Most of the countries in order to avoid these uncertainties and restrained by their climate commitments at the national and global levels are switching to renewables such as wind and solar energy resources and adopting technologies to preserve energy resources. However, the supply of key inputs for generation of power still lies with a few countries with China dominating the scenario. Hence, energy security is gaining momentum in different forms with changing energy requirements in the age of rising demands for electricity not only to meet the needs of burgeoning urban population and industries, demands for electric vehicles, semiconductor industries and processing and use of Artificial Intelligence (AI) technology need more supply of power than at point in history.
Even while most of the economies are gradually transitioning to renewable sources of power with the use of green technology, it does not mean, however, the significance of sources of oil and natural gas has anyways diminished. The negative impacts of Middle Eastern oil crisis of 1973 led the developed countries to take concerted efforts to make oil supplies more reliable by interweaving it with open market.
Growing Fragmentations in the Global Economy
Geopolitical rivalries among the great powers are leading to frequent polarization and fragmentation of economy contradicting the globalization process that ensued with the end of the Cold War. The US after decades of investment in the forces and processes of globalisation is resorting to state capitalism to maintain its sway over energy market and make its sanctions against energy producing countries effective. On the other side, China joined World Trade Organization (WTO) in 2001 to keep itself tied to global supply chains but soon began to invest in alternative routes to secure its energy supplies. Beijing through its Belt and Road Initiative (BRI), has been financing pipelines, ports, refineries and power plants in order to secure its routes of energy resources at a time when geopolitical conflicts around the world are leading to fluctuations and disruptions in energy market.
Weaponization of Energy Independence by US
In order to avoid the reiteration of the oil shocks of 1970s and in a drive to maintain its hegemony, the US embarked on a strategy of energy independence by ramping up its shale oil production capacity as well as by developing secured supply chains of natural resources from diverse destinations ranging from its backyard Latin America to Middle Eastern and Central Asian regions. On the other side, many developing countries including India and the developed ones in the European continent remained highly energy-dependent and became more vulnerable in the aftermath of Russia-Ukraine War. Despite Trump administration's rigid posture, they continued to import oil from Russia and faced high tariffs on their exports to the US. The US owing to its energy independence has been able to maintain massive sanctions against energy producing countries such as Iran and Russia in a bid to change their intransigent behaviour as per its preferences.
The US shale oil production largely covered up the growing global energy demands but that is going to decline according to the US Energy Administration. That would fuel competition among countries to secure energy resources from other locations. The growing energy needs would compel the countries to look for wind, solar and other sources of energy. Dependence on the Middle Eastern, Russian and Central Asian energy resources will grow further making the transit routes such as the Strait of Hormuz, Strait of Malacca, Turkish Straits, Danish Strait, Panama Canal and Bab el-Mandeb Strait as significant choke-points in the geopolitical competition. The American prolonged fight against the Houthis in the Red Sea pointed to the difficulties in controlling such choke-points. While the US will still enjoy energy independence, it will try to effectively control these choke-points to deny advantages to other great powers.
Clean Energy and Predominance of China
The unpredictable nature of the Trump administration's foreign policy has sparked trepidation among energy-dependent nations, casting doubts on the American reliability as a partner. As the world embarks on a transition to clean energy, new challenges are emerging. According to the International Energy Agency (IEA), electricity's share of global energy is poised to increase from 20% to 25% by 2035. While much of this electricity can be generated domestically, importers of electricity will be left vulnerable due to the limited number of exporters and the difficulties associated with storage. China, meanwhile, is strategically positioning itself as a dominant player in the clean energy landscape. The country's grip on the supply chain is formidable, with control over critical minerals and rare earths that are essential for transmission lines, solar panels, batteries, and electric grids. As demand for copper, nickel, lithium, and graphite surges, China's dominance in the global market becomes increasingly evident. The IEA's assessment reveals that China is the top producer of 19 out of 20 critical minerals, accounting for 70% of global refining capacity. Moreover, China boasts an impressive 80% share of solar manufacturing capacity, dominates the wind supply chain, and holds an overwhelming 85% of battery production capacity, with a staggering 95% control over anode production – the crucial component that stores energy in batteries. The American dependence on China for these critical minerals and Beijing’s export controls over these rare earths led the Trump administration to change its confrontational tariffs measures. As China’s significance grows in the area of clean energy, the significance of South China Sea will rise further in the geopolitical competition.
Historically, great powers have used various instruments such as controlling production of energy resources and effectively blocking or disrupting the routes of supplying energy resources to influence and shape foreign policy of energy-dependent countries. The great power competition, protracted wars involving great powers and distortions of global market are likely to bring new challenges before many countries towards insuring themselves from supply disruptions.
The changing geopolitical landscape participated by incessant trade wars, the protracted war between Russia and Ukraine, devastating wars in the Middle East sabotaging the Arab-Israel peace process and tensions between US and China over the unresolved territorial disputes over Taiwan and South China Sea raises uncertainties among many countries around the globe whether they can have secured access to energy resources that they have had since the end of the Cold War until the beginning of this decade.
The imperative of energy security is becoming more critical to a country’s foreign policy. Prolonged wars in Europe and Asia and great powers' intervention in these wars and competitions for power among them in various regions have raised uncertainties as regards the supply and procurement of natural resources such as oil and natural gas in the globalised market. Most of the countries in order to avoid these uncertainties and restrained by their climate commitments at the national and global levels are switching to renewables such as wind and solar energy resources and adopting technologies to preserve energy resources. However, the supply of key inputs for generation of power still lies with a few countries with China dominating the scenario. Hence, energy security is gaining momentum in different forms with changing energy requirements in the age of rising demands for electricity not only to meet the needs of burgeoning urban population and industries, demands for electric vehicles, semiconductor industries and processing and use of Artificial Intelligence (AI) technology need more supply of power than at point in history.
Even while most of the economies are gradually transitioning to renewable sources of power with the use of green technology, it does not mean, however, the significance of sources of oil and natural gas has anyways diminished. The negative impacts of Middle Eastern oil crisis of 1973 led the developed countries to take concerted efforts to make oil supplies more reliable by interweaving it with open market.
Growing Fragmentations in the Global Economy
Geopolitical rivalries among the great powers are leading to frequent polarization and fragmentation of economy contradicting the globalization process that ensued with the end of the Cold War. The US after decades of investment in the forces and processes of globalisation is resorting to state capitalism to maintain its sway over energy market and make its sanctions against energy producing countries effective. On the other side, China joined World Trade Organization (WTO) in 2001 to keep itself tied to global supply chains but soon began to invest in alternative routes to secure its energy supplies. Beijing through its Belt and Road Initiative (BRI), has been financing pipelines, ports, refineries and power plants in order to secure its routes of energy resources at a time when geopolitical conflicts around the world are leading to fluctuations and disruptions in energy market.
Weaponization of Energy Independence by US
In order to avoid the reiteration of the oil shocks of 1970s and in a drive to maintain its hegemony, the US embarked on a strategy of energy independence by ramping up its shale oil production capacity as well as by developing secured supply chains of natural resources from diverse destinations ranging from its backyard Latin America to Middle Eastern and Central Asian regions. On the other side, many developing countries including India and the developed ones in the European continent remained highly energy-dependent and became more vulnerable in the aftermath of Russia-Ukraine War. Despite Trump administration's rigid posture, they continued to import oil from Russia and faced high tariffs on their exports to the US. The US owing to its energy independence has been able to maintain massive sanctions against energy producing countries such as Iran and Russia in a bid to change their intransigent behaviour as per its preferences.
The US shale oil production largely covered up the growing global energy demands but that is going to decline according to the US Energy Administration. That would fuel competition among countries to secure energy resources from other locations. The growing energy needs would compel the countries to look for wind, solar and other sources of energy. Dependence on the Middle Eastern, Russian and Central Asian energy resources will grow further making the transit routes such as the Strait of Hormuz, Strait of Malacca, Turkish Straits, Danish Strait, Panama Canal and Bab el-Mandeb Strait as significant choke-points in the geopolitical competition. The American prolonged fight against the Houthis in the Red Sea pointed to the difficulties in controlling such choke-points. While the US will still enjoy energy independence, it will try to effectively control these choke-points to deny advantages to other great powers.
Clean Energy and Predominance of China
The unpredictable nature of the Trump administration's foreign policy has sparked trepidation among energy-dependent nations, casting doubts on the American reliability as a partner. As the world embarks on a transition to clean energy, new challenges are emerging. According to the International Energy Agency (IEA), electricity's share of global energy is poised to increase from 20% to 25% by 2035. While much of this electricity can be generated domestically, importers of electricity will be left vulnerable due to the limited number of exporters and the difficulties associated with storage. China, meanwhile, is strategically positioning itself as a dominant player in the clean energy landscape. The country's grip on the supply chain is formidable, with control over critical minerals and rare earths that are essential for transmission lines, solar panels, batteries, and electric grids. As demand for copper, nickel, lithium, and graphite surges, China's dominance in the global market becomes increasingly evident. The IEA's assessment reveals that China is the top producer of 19 out of 20 critical minerals, accounting for 70% of global refining capacity. Moreover, China boasts an impressive 80% share of solar manufacturing capacity, dominates the wind supply chain, and holds an overwhelming 85% of battery production capacity, with a staggering 95% control over anode production – the crucial component that stores energy in batteries. The American dependence on China for these critical minerals and Beijing’s export controls over these rare earths led the Trump administration to change its confrontational tariffs measures. As China’s significance grows in the area of clean energy, the significance of South China Sea will rise further in the geopolitical competition.
Historically, great powers have used various instruments such as controlling production of energy resources and effectively blocking or disrupting the routes of supplying energy resources to influence and shape foreign policy of energy-dependent countries. The great power competition, protracted wars involving great powers and distortions of global market are likely to bring new challenges before many countries towards insuring themselves from supply disruptions.
The changing geopolitical landscape participated by incessant trade wars, the protracted war between Russia and Ukraine, devastating wars in the Middle East sabotaging the Arab-Israel peace process and tensions between US and China over the unresolved territorial disputes over Taiwan and South China Sea raises uncertainties among many countries around the globe whether they can have secured access to energy resources that they have had since the end of the Cold War until the beginning of this decade.
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