How Geopolitics of Oil Transformed the World

Oil has been at the center of global politics for more than a century, shaping economies, alliances, and conflicts. The immense value of oil as a most critical energy resource has made it a driving force in geopolitical maneuvering, developing state relations, and international policy. The geopolitics of oil, in essence, has transformed the world in much broader dimensions by intertwining energy security with national interests, creating both cooperation and rivalry among states. From the rise of global energy powers to the volatility of oil prices, this complex interplay continues to influence global affairs.

Geopolitics of Oil: Rise of Oil as a Strategic Resource

The industrial revolution, which began in the late 19th century, laid the groundwork for the rise and importance of oil as a strategic commodity. 

With the expansion of mechanized industries and the advent of automobiles and airplanes, oil quickly became essential carving out a space for itself in the world. The shift from coal towards oil as the primary energy source, especially during the time of World War I, cemented oil’s role in military and industrial dominance. Oil became synonymous with power, and securing access to it became a top priority for all the industrialized nations. 

As per the book “The Age of Oil” written by Leonardo Maugeri, the development of oil during this period is described as a “new epoch of energy,” where oil’s unmatched efficiency and adaptability gave it dominance over other forms of fuel. This transition was not only industrial but also a political transformation, as governments began to recognize the strategic importance of controlling oil resources. History shows that the birth of the modern oil industry, spearheaded by companies like Standard Oil, shaped both economic structures and national policies, by laying the groundwork for oil’s pivotal role in future global affairs. 

Source of Shaping Global Alliances 

Throughout the 20th century, the political significance of oil transformed how countries planned to forge alliances. The Middle East, home to some of the largest reserves, became a key focus of Western powers. The United States, in particular, sought to establish strong relations with oil-rich Gulf countries, including Saudi Arabia, creating a mutually beneficial dynamic. In return, the U.S. used to provide military support and security guarantees to these nations in exchange for stable oil supplies. 

The unique position of Middle Eastern countries in terms of global oil supply set the stage for countries to think about alliances. Middle eastern nations, which were initially under colonial influence, gradually gained control over their resources, especially after the rise of nationalism and the oil nationalizations in the mid-20th century. This shift allowed countries like Saudi Arabia and Iran to not only wield economic power but also to assert political independence and influence on the global stage.

Geopolitics of Oil: Conflicts and Wars over Oil

Oil has been a factor in numerous conflicts, as states and non-state actors have vied for control over this crucial resource. 

One of the most notable instances was the 1973 Arab-Israeli War, which led to an oil embargo by Arab members of Organization of the Petroleum Exporting Countries (OPEC) against countries supporting Israel, particularly the U.S. and Western Europe. This embargo caused a global oil crisis, quadrupling prices and demonstrating the political power oil-producing nations wielded. 

The 1973 oil embargo is termed as a historical turning point in oil politics. As it not only showcased the ability of oil producers to influence global events but also marked the moment when Western countries realized their vulnerability. Moreover, this event led to major shifts in energy policies, including the diversification of energy sources and the development of strategic oil reserves in countries like the U.S.  

Likewise, The Gulf Wars in the 1990s and early 2000s further underscored the link between oil and conflict. The invasion of Kuwait by Iraq in 1990 was largely motivated by control over oil reserves. Similarly, critics of the 2003 U.S. invasion of Iraq argue that oil was a significant, if not primary, motivator. These were the conflicts which paved the way for a broader “geopolitical chessboard” of oil, where control over resources became intertwined with military interventions and global security concerns.

Geopolitics of Energy Transition 

Access to energy has historically been a crucial driver of national wealth and power. Nations that effectively harness their energy resources have expanded their industries and economies, while those that export energy have gained economic returns and geopolitical influence. The transition from wood and animal power to coal, and later to oil and gas, has consistently reshaped patterns of geopolitics throughout the world. 

Britain’s dominance in coal during the 19th century was pivotal for its empire, fueling its industrial and naval strength. However, the shift to oil, initiated by British naval demand, marked a significant transition. Oil’s strategic advantages, such as greater range and ease of refueling, led to increased exploration and global supply, eventually making oil the dominant energy source by the early 20th century. Ironically, this transition diminished Britain’s global status as it became reliant on imported oil. 

As the world followed Britain’s lead away from coal, countries like the United States, Russia, and those in the Middle East capitalized on their hydrocarbon resources to build wealth and geopolitical power. This shift contributed to Britain’s relative decline and helped elevate the U.S. to an economic superpower during World War I. 

In the latter half of the 20th century, natural gas emerged as a vital energy source, often found alongside oil deposits. Today, both Russia and the U.S. are leading natural gas producers. Russia’s gas reserves have maintained its status as an energy superpower, while the U.S. has gained significant geopolitical influence through its natural gas exports, sometimes surpassing its oil exports in strategic importance.

Also See: The Economics of Climate Change: Who Pays the Price?

The Next Energy Transition is the Shift from Oil and Gas to Renewables

As climate change concerns have grown, oil politics is now facing new challenges with the global push towards renewable energy. The transition away from fossil fuels towards greener alternatives such as solar, wind, and electric vehicles is reshaping the energy landscape. While oil remains essential, especially in transportation and industry, the shift toward sustainable energy sources is gradually reducing its dominance.

Similar to previous energy transitions, the current shift is driven by significant global events, particularly the impacts and risks associated with climate change and a more contentious geopolitical landscape. This transition is further supported by advancements in technology and decreasing costs in the renewables sector. In the era of hydrocarbons, wealth and power were influenced not just by resource availability but also by policy frameworks and geopolitical alliances. The same dynamics will apply to renewable energy in the coming decades. Above all, while the future points to a shift towards renewable energy, the politics of oil will remain central to international relations as long as oil continues to power industries and militaries. Understanding the actual dynamics of the geopolitics of oil is essential in a broader context in order to grasp the broader forces at play in global power structures, both past and present. 

The views expressed in this article are the author’s own. They do not necessarily reflect the editorial policy of the South Asia Times.

Hamna Ghias

Hamna Ghias Sheikh, an MPhil International Relations Scholar, Research Associate at Pakistan Navy War College, columnist specializing in international affairs. With a growing focus on the energy sector, particularly exploration and production (E&P) in offshore drilling, she is rapidly establishing herself as a subject matter expert in this critical area. Can be reached at hamna.sheikh009@gmail.com

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