Energy drives geopolitical conflict, yet leaders lack courage to address challenges
The Paradox of the Global Energy Landscape
The current global energy landscape is marked by a paradox: despite widespread instability, oil prices remain low as supply continues to outpace demand. This situation highlights the complex interplay between global politics, economic factors, and environmental concerns that shape today's energy market.
In its World Energy Outlook 2025, the International Energy Agency (IEA) emphasized that energy remains central to geopolitical tensions. Traditional threats to fuel supply are now compounded by new challenges, such as restrictions on trade and increased exposure to cyber, operational, and weather-related risks for electricity systems.
Diverse Approaches to Energy Security
Countries are using various strategies to achieve their goals of energy security and affordability. Some nations are shifting towards renewable energy sources, while others continue to emphasize traditional fuel supplies. This divergence in approaches reflects the unique priorities and circumstances of each country.
Despite the growing risks associated with climate change—evidenced by 2024 being the hottest year on record—there is a noticeable lack of political will driving national and international efforts to reduce emissions. This gap in action poses a significant challenge to achieving global climate targets.
The Rise of Nuclear Power
Nuclear power is experiencing a resurgence, with over 40 countries incorporating it into their energy strategies. These countries are implementing measures to develop new nuclear projects, including both traditional large-scale plants and innovative designs like small modular reactors.
According to the IEA, global nuclear power capacity is set to increase by at least one-third by 2035 after more than two decades of stagnation. This growth signals a renewed interest in nuclear energy as a reliable and low-carbon source of power.
Vulnerabilities in Critical Mineral Supply Chains
Alongside the traditional risks associated with oil and gas supply chains, there are new vulnerabilities emerging in critical mineral supply chains. These minerals are essential for various technologies, including power grids, batteries, electric vehicles (EVs), AI chips, jet engines, and defense systems.
The greatest risk lies in the high degree of market concentration. One country dominates the refining of 19 out of 20 energy-related strategic minerals, holding an average market share of about 70%. As of November, more than half of these key minerals are subject to some form of export restriction.
Building Resilient Supply Chains
To address these challenges, building more diverse and resilient supply chains for critical minerals will require coordinated policy action. Market forces alone may not be sufficient to ensure stability and security in these vital areas.
Strengthening Resilience Against Threats
In a world facing natural threats and malicious activities, there is an urgent need to strengthen resilience against growing weather-related threats, cyberattacks, and other attacks on critical infrastructure. Recent annual disruptions to critical energy systems have affected the supply of energy to more than 200 million households worldwide.
Droughts are reducing output from hydropower and some thermal generators, while storms, floods, and wildfires are forcing shutdowns and damaging facilities ranging from solar plants to offshore oil and gas platforms. Power lines remain especially exposed, with transmission and distribution grids affected in approximately 85% of incidents.
Weather-related risks are projected to increase across all scenarios, with each exceeding 1.5C of warming on a recurring basis by around 2030. Pathways diverge only after 2035, highlighting the need for immediate action.
The Need for Political Will
The IEA concluded that "urgent energy security challenges are front and center for today’s energy policymakers, requiring the same spirit and focus that governments showed when they created the IEA after the 1973 oil shock." Political will is crucial to addressing today’s energy challenges, yet it may be the most scarce resource of all.
A decade after the Paris Agreement was signed, some formal national commitments have weakened, and the United States has withdrawn from the agreement. This lack of commitment underscores the importance of sustained and collaborative efforts to ensure a secure and sustainable energy future.
