Energy in Politics. Energy for Politics

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What is energy Politics?

The use and leverage provided by energy whether it is in hydro carbons or in any other form is called energy Politics.

It gives political, economic and military magnitude to a country in regional and global politics.

In last two decades the excessive consumption of rising economies like China, Brazil and India have sky rocketed the prices of hydro carbons products when compared to past prices.

A phenomena not seen for a long time since 1970s oil embargo and Iran Revolution, 1979.  

The majority of scholars now believe that international relations and politics are the International- energy-politics and International -energy- relations making and breaking the mutual relations and alignment between nations for their energy requirements. Hence the word “Energy” now has placed itself in the centre of international relations energizing the world relations and politics!!

The International Energy Agency (IEA) estimated cost for the energy requirement and transition to 2030 is 26 trillion USSD. Major portion of whom would be used for uplifting the existing energy infrastructure and transition to green and renewable energy resources with the additional benefit of creating 25 million jobs worldwide giving a boost to World economy as previewed by ILO and IRENA.

Historical Background of Energy use in Politics.

Before the advent of industrial revolution in 17th century, the needs and modes of energy and its use were very modest and limited.

The energy consumption doubled in each decade in the beginning of 20th century.

Also Read: The Golding of National Security

However with less population and with the excessive availability of energy resources at that time some hundred years ago, no one were concerned and conscious about the ruthless use of energy resources.

The WWII and the US nuclear bombing of Japan made the World about the strategic use energy resources and its importance for national security and superiority. Thus, a new race for energy security, preservation and superiority started among nations which now focused on the nuclear energy.

The 1973 oil embargo was the first quagmire of oil and energy that seriously upset the cosy Western societies.

US proactively supported Israel in the Arab Israel war of 1973. The oil producing Arab countries as a reprisal to US and European allies of Israel cut down oil supply to them causing them to suffer a cold harsh winter from October 1973 to January 1974.

Just after five years, the Shah of Iran was ousted by Ayatollah Khomeini in February 1979.

 Iran being the fourth largest producer of oil with five billion barrels per day (MBD) to the non-communist economies was another stunning blow to the West and US in short time. Oil prices grew 150 percent just in few weeks in these countries.

This was what Jimmy Carter called ‘the moral equivalent of war’ that is to protect American national security and interests from any danger at any cost.

The “Oil glut “of 1986 was the result of Oil embargo (1973) and Oil shock (1979).

Fearing that anything like these two previous crisis might happen to them again, the surplus oil production crashed the oil market bringing crude oil prices near-to-zero. 

Saudi Arabia annoyed by the ill-coordinated efforts of OPEC to stabilize the market, opened the spigot of oil production razing the prices to 10 US dollar per barrel in 1986 teaching them a lesson!!

The Kuwait invasion by Iraq in August 1990 first hiked the oil prices from 15 USD /bbl to 42 USD/bbl in October 1990. The oil plummeted downward after US allies launched their operation to free Kuwait from Iraqi occupation.

The new emerging economies like China, India and others demands further hiked the Oil prices. The WTI prices from 2003 to 2008 rocketed from 28 USD/bbl to 134 USD/bbl.  The geopolitical situation in the Middle East was one of the main reasons for this price-jumping. The five years upward going graph of prices was now moving downward in just few months.

Again a scenario similar to the Oil glut of 1986 awaited 2010s to slash down prices beyond one’s expectations.

It was the period in which the Oil prices reached to 100 USD/bbl in two long years when compared to the past periods of price hike.

The introduction of new technology made it possible to explore and get more oil.

Saudi Arabia raised its oil production drastically to reduce oil prices for their American and European competitors. A trick to give them a financial blow and knock them out from the oil industry. But the scheme did not work this time!!

The shale production (LTO) of USA in two years reduced the prices from 100 USD/bbl to 26 USD/bbl. An unbreakable record in oil rigging!!

The COVID-19 and the resultant worldwide lockdown further slump down the energy market which very negativity affected the economies of oil exporting countries solely dependent on its export.

The Russian Ukraine war (2022) and the European Union refusal to buy Russian oil and gas and energy rationing in Europe is hiking the oil prices.

The price of the Russian crude oil, Ural, is falling due to these sanctions.

The 40 percent of Russian gas and 53 percent of its oil was exported to Europe before Ukraine war in February 2022. Now this Russian gas and oil export is turned towards China and India and other Asian countries who are cashing out this cheap oil opportunity for themselves.

Energy Politics in Central Asia

Energy production, protection and preservation for national security and interests are crucial part of new international relations and dynamics.

Central Asia is the ground zero of this new energy geopolitics where all peripheral and world powers compete with each other.

Japan, China, India and South Korea consume one-quarter of total world energy production. Presenting on a graphical way;   

But real obstacle to these five Central Asian countries are their bordering with Iran, Afghanistan and Russia who are sanctioned by international community which also affect their mutual and border trade.

Moreover, these countries are prone to political and economic turmoil throughout their history and especially after their independence from Soviet Union.

Kazakhstan political unrest (2022), Kabul fall to Taliban (2021), and Tajikistan, Uzbekistan and Turkeimanistan share 2390 kilo meters long border with Afghanistan fears a spill-over of militancy and terrorism into their countries after Taliban coming into power in Afghanistan. 

TAPI project was ceased because of geopolitical complications and rivalries among the regional countries.

Beijing is eager to invest in CARs oil and gas infrastructure for meeting its energy needs. This may be bad omen for India due to its tensed relations with China after border skirmishes of May 2020 and again Taliban capturing of Kabul against whom they actively supported the former Afghan government of President Ashraf Ghani. 

China, USA and Russia all are vying in this region for their influence. But Moscow being a traditional shepherd of this region consider these areas as his backyard that has to be protected and preserved from foreign powers sway. This is what Russia calls himself the ‘Energy-Superpower.’  

By seeing the above table #1, the Top Ten consumers of Oil and Energy in 2021, it appears that half of the World population (49.1) consumes more than 61 percent of World Oil and Energy resources when compared to the rest of the World population (100 percent).

Table#3, Country Name with estimated percentage in the Worlds’ Population (2021)

Country NameEstimated percentage in the Worlds’ Population (2021)
South Korea0.66

The New scenario after Ukraine Russia war

Europe imported more than 23 percent of its oil and 39 percent of gas from the Russian Federation in 2020. After February 2022, the two sides, Russia and EU are wrangling over the sale and purchase of this oil and gas as a bargaining chip for getting an upper hand in the World politics.

Initially Russia does not stop supply to Europe even after the start of war though the energy pipelines crossed through the Ukrainian mainland.

The Russian energy cut-out to Europe came as a result of Poland and Bulgaria refusal to pay in Russian Roubles and Finland applying for NATO membership. 

These minor bruises to the European energy became deep slit when Russia shut down the Nordstream-1 pipeline in July on the pretext of maintenance thus severely affecting supply to Germany.

The development and supply of oil and gas to European mainland from Central Asia and Eastern Mediterranean would take years to complete.

If Europe stand on its commitment to dwindle its energy dependency on Russia by two-thirds till 2024, the yawning gap of 100 billion cubic meter (bcm) per day of gas supply to Europe be filled from US supply of 15 billion cubic meter per day.

Germany and Italy have booked Qatar and Algeria LNGs for themselves for reliving their dependency on Russian energy.

This uncertainty is not only affecting the global oil market but the European political leaders are now seriously thinking about the energy diversification or transition and reducing their dependency on Russian energy, if it could not altogether be removed.

The Asian and African markets may be best places for Moscow oil and gas export but the exploration and development of new energy reserves especially in its Artic may suffer from the Western economic and scientific absence. 

China may benefit from this opportunity. But it has a hidden strategic flaw in itself. Beijing too much dependency on Russian energy may render it vulnerable to Moscow blackmailing, both political and economic. A lookalike of present European situation!! 

Energy in Politics. Energy for Politics

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