Energy Markets & Geopolitics: From Oil Price Volatility to Renewable Transition

The 21st century stands on a chaotic, disruptive, and strenuous moment when different continents on earth are at war primarily to protect their territorial integrity and to protect themselves from those blundering politicians and leaders who are living in delusions of grandeur because of their expansionist policies. But in all of these scenarios, oil has always remained a source of contention, and the nation-states have a bone to pick with each other as they compete for control of this liquid gold. Oil has become one of the indispensable parts of the economy of the country, and of course the political arena cannot remain isolated from this. From being used as industrial raw material to vehicles, production to consumption, trade, and commerce—all vibrant aspects remain dependent directly or indirectly on this rule. This has also, at the same time, created a lot of uncertainties because this resource, being scarce and not evenly distributed, has invited countries, including major world powers, to throw their hats in the ring. 

The Middle East, or the Fertile Crescent, holds 50-80% of global proven reserves, and major fields are concentrated in the Persian Gulf region. Venezuela, Saudi Arabia, Iran, and Iraq are followed by Canada, Russia and the U.S. Imagine the interconnectedness of this world today. Oil is among the things that connect 195 countries of the world. Having realised the importance of oil and its distribution, see the situation all around you. The 21st century’s RUSSIA–UKRAINE war, wherein the 2014 annexation of Crimea took place and the following invasion attempt on Ukraine, was driven in part by a desire to secure offshore gas resources in the Black Sea or, more recently, the U.S. desire to control and rebuild Venezuela by the dramatic event of arresting Maduro. Thus, these facts remind us that resource wars are not a new phenomenon. But what we need to realise is that events in one part of the world have a consequence in the other. This is what we now turn to: THE OIL PRICE VOLATILITY, which means the dynamic and unprecedented nature of oil prices.

A 2023 World Bank outlook modelled how oil prices might change with varying levels of supply disruptions due to Middle East conflict, from small disruptions leading to a supply loss of 0.5-2 million barrels a day to large disruptions leading to a loss of 6-8 million barrels a day. All of this is evident in the case of the Ukraine war and due to the Israel-Iran tensions in June 2025. This is due to the supply disruption that takes place due to wars or the increasing demand for oil when a conflict starts. Everything is linked—conflict happens, demand increases, and supply disrupts and affects people at home domestically and hampers industries and the economy. Also, those countries that are the alliance partners come under severe scrutiny, as seen in the U.S. threatening India to stop buying Russian oil and thus imposing tariffs.

But the world is changing—nothing is transient, and the bugle is already sounded. Given the fact that the prices of oil are so uncertain, its supply is also not transfixed, and it’s a scarce resource, a total shift to renewable and non-conventional sources of energy is inevitable. Keeping India’s aims and objectives in mind, we have already made substantial efforts in channelling solar energy in the agricultural sector, but it’s a long journey. These resources can be replenished and renewed and are therefore effective in perspective or long-term plan. Therefore, it’s on all of us, as citizens of this cosmopolitan world, to channel our efforts in this direction because solar energy, wind energy, tidal energy, and geothermal energy have a long future, and it’s undeniable.

- Tanish Sethi (I B.A. Hons History)

Citations/Sources Used

Salameh, M. G. (2014) Oil Wars 

World Distribution of Petroleum and Mineral Oil