Energy security – a geo-political and geo-strategic issue of growing significance

Posted in Peace and Conflict , Energy Security , Other | 02-Sep-07 | Author: Ioannis Michaletos

Ioannis Michaletos is WSN Editor South East Europe.

The past few years and especially since the inaction of the "World against terror", the oil prices have gone up, whilst the societies across all the major industrial states, are beginning to appreciate the virtues of renewable energy production. The situation on a global scale is still in flux, since opposite interests drive their own agenda in order to secure multi billion investments or to gain political influence through the effective tool of energy, either in the form of pipelines, terminals and offshore installations.

The volatile Middle East is still the center of the globe when it comes to energy policy and its consequences for the rest of the world. For example according to the Institute for International Economics, USA faces a probable danger of an economic recession, estimated at 30% due to a sudden increase on the hydrocarbon price index. Moreover the Center for Global Energy Studies in London, estimates that the geopolitical turmoil in Iran, Iraq, Nigeria and Venezuela; coupled with the emergence of “Energy nationalism", has reduced the daily supply of oil -From 2000 onwards- by 7.8 million barrels. This is a substantial decrease, comparable with the daily consumption of Germany & France combined. For the time being five are the top spots in the map where the 21st "Energy game" is being unfolded and will affect the economy worldwide for the coming years.

Middle East-Iran

More than 60% of the world's oil reserves are to be found in the Middle East. Its importance for the stability of the markets is tremendous, and any upturn of its center of gravity-Saudi Arabia- will find oil prices reaching as high as 250 USD in just a few days. In a few words the key for the future of the economy is currently in the Kingdom of the Saud and the neighboring oil-rich Gulf states. Iran is the other important state in the region. The already existing agreements between Teheran and the French corporation TotalFinaElf and the British-Dutch Royal Dutch Shell, supply the European market with the much needed gas it needs to feed its industrial progress. A war against Iran is estimated to skyrocket the prices almost instantly to around 130 USD, thus throwing European economies to instant recession and consequently the whole world. The perennial problems of the region, the war in Iraq, the existence of a multitude of terrorist organizations, assist in creating a perpetual feeling of instability and will sooner or later culminate to some perilous outcomes for the world.

Lastly the issue of Iraq with its abundance of oil reserves is of critical nature as to how the international community could facilitate stability by constructing the country's oil industry in the short-term and supply the markets with cheaper energy. The decision by the incumbent American Administration will decide on the fate of the Iraqi oil that is necessary for the function of the global economic system.


This country might not be a significant producer of energy; nevertheless it is the driving force, due to its high growth rate, of the oil prices. Currently it has invested heavily in Africa and it imports some 2.8 million barrels of oil daily. In Nigeria Beijing has secured investments of some 4 billion USD and with Iran last it signed a mega-deal of 70 billion USD that includes the importation of 150,000 of oil for the next years and the ability to exploit the gigantic Giadavaran oil-rich territory. Without China prices would most certainly be much lower.


Russia is a traditional energy powerhouse, and now under the dominant posture of President Putin, it has expanded dramatically its clout in the world scene. Under the guidance of a state capitalism scheme on which Gazprom Corporation has a leading role, it constructs lengthy pipelines from Siberia to the Pacific Ocean & China, as well as Russia-to-Europe ones. Further, the events of the past few years where the Kremlin pressured Ukraine, Byelorussia and the Baltic states to accept gas prices increases, clearly demonstrates the ability of the "New Russia" to play hard when it comes in securing energy influence. The EU-Russian relations are already under the aura of energy politics and will remain so, despite Putin's possible withdrawal from the Presidency next year, since this Eurasian country has firmly decided to proceed in the global arena by using as a main instrument for its foreign policy oil & natural gas.


The country with the largest reservoirs of oil in South America is under the administration of Hugo Chavez that steadily builds a global supporting network sustained by the natural deposits of his land. Cuba, Nicaragua, London and even Harlem -New York, are some of the countries and cities that have benefited from Venezuela's oil subsidy programs aimed to secure either political influence or to present the new status of the country's leadership as an ethical and justice driven one. Moreover the corporations Total and ENI have already obliged to hand management of two of their oil refineries to the state, and since 2006 32 energy projects fueled by foreign investors became joint ventures with the state-controlled PDVSA. According to the consultancy Wood Mackenzie, Chavez's government has gained over 5.4 billion USD with those deals, and one can state that Venezuela is a clear example of energy nationalism in the eve of 21st century.


The largest African oil producer faces great obstacles due to the conflicts in the infamous Niger Delta, along with widespread poverty corruption and public resentment of the heavy handed political patronage. It is more than certain that the previous factors along with the rising population growth and the Islamic-Christian political and social cleavage might throw the country into a political instability course, any time soon, thus reflecting on global oil prices.


Global oil producer countries (2004), IMF

Saudi Arabia: 12%
Russia: 11%
USA: 10%
Mexico: 5%
Canada: 4%
Venezuela: 4%
UAE: 3%
Norway: 3%
China: 3%
Rest of the world: 40%

Global oil reserves (2004), IMF

Saudi Arabia: 20%
Canada: 14%
Iran: 10%
Iraq: 9%
UAE: 8%
Kuweit: 8%
Venezuela: 6%
Russia: 5%
Libya: 3%
Nigeria: 2%
Rest of the world: 15%