Energy drives geopolitical conflict, yet leaders lack the courage to confront challenges
The Global Energy Paradox
The current global energy landscape is marked by a paradox: despite ongoing global instability, oil prices remain low as supply continues to exceed demand. This situation highlights the complex interplay of factors influencing the energy market today.
In its World Energy Outlook 2025, the International Energy Agency (IEA) emphasized that energy remains at the center of today’s geopolitical tensions. Traditional threats to fuel supply are now compounded by new challenges, including restrictions on energy access and growing exposure to cyber, operational, and weather-related risks.
Divergent Approaches to Energy Security
The agency outlined a complex backdrop where countries are using different strategies to achieve their priorities of energy security and affordability. Some nations are shifting towards renewable energy sources, while others continue to emphasize traditional fuel supplies. This divergence reflects varying national interests and circumstances.
Although the risks of climate change are increasing, with 2024 being the hottest year on record, there is less political will driving national and international efforts to reduce emissions. This lack of momentum poses a significant challenge to achieving global climate goals.
The Rise of Nuclear Power
Nuclear power is experiencing a resurgence, with over 40 countries incorporating it into their energy strategies and implementing measures to develop new projects. Investment in both traditional large-scale nuclear plants and innovative designs such as small modular reactors has increased significantly.
According to the IEA, after more than two decades of stagnation, global nuclear power capacity is expected to increase by at least one-third by 2035. This growth underscores the renewed interest in nuclear energy as a reliable and low-carbon source of power.
Vulnerabilities in Critical Mineral Supply Chains
Alongside the old risks associated with oil and gas supply security, new vulnerabilities have emerged, particularly in critical mineral supply chains. The greatest risk lies in the high degree of market concentration, with one country dominating the refining of 19 out of 20 energy-related strategic minerals, holding an average market share of about 70%.
Critical minerals are essential for various industries, including power grids, batteries, electric vehicles (EVs), AI chips, jet engines, and defense systems. As of November, more than half of these key minerals are now subject to some form of export restriction.
Building more diverse and resilient supply chains for critical minerals will require coordinated policy action, as market forces alone may not be sufficient. The IEA warned that this will be a complex and challenging task.
Strengthening Resilience Against Threats
In a world facing natural threats and malicious actors, there is an urgent need to strengthen resilience against growing weather-related threats, cyberattacks, and other malicious activities targeting critical infrastructure.
According to the IEA, 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 1.5°C of warming on a recurring basis by around 2030. Pathways diverge only after 2035.
The Urgent Need for Political Will
The agency 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 might 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 highlights the need for renewed focus and collaboration on global energy issues.
