The return of the oil conflict

Oil is back at the centre of global power play, disrupting geopolitics and shaping a new energy realism.

In a dramatic escalation, Donald Trump’s move to choke Venezuela’s oil lifelines stunned the world, a reminder that energy power plays can still trigger global upheaval. History suggests that once such instruments are normalised, others will follow – energy coercion rarely remains the privilege of a single power.

When Daniel Yergin described the last quarter of the twentieth century as the “Age of Oil,” he was not merely naming a commodity cycle. In his magisterial work The Prize, oil emerges as destiny – fuel for modernity, trigger for wars, and the lubricant of power.

He ended with a sombre warning: that blood has been spilt for oil, and more will follow. Three decades later, amid breathless talk of decarbonisation and energy transitions, oil has staged an unembarrassed return; not as a relic of the past, but as the fulcrum of contemporary geopolitics.

We were told the future would be green, digital, and post-hydrocarbon. Solar panels would replace pipelines; batteries would dethrone barrels. Yet today’s most combustible geopolitical flashpoints are mapped onto oilfields, shipping lanes, sanctions regimes, and energy chokepoints. The language may have changed – “energy security,” “supply resilience,” “strategic autonomy” – but the logic is old and unforgiving. Oil has returned as the new gold. What is being disrupted is not merely energy markets, but the post-war assumption that power would increasingly be exercised through rules rather than raw leverage.

Consider the war in Ukraine. While the conflict has many layers – sovereignty, NATO expansion, post-Cold War resentments – energy sits at its core. Russia’s hydrocarbon wealth underwrites its war economy and shapes Europe’s strategic anxieties. Europe’s effort to wean itself off Russian oil and gas has redrawn global energy flows, sending crude eastward at discounted prices and tightening markets elsewhere. Energy sanctions have become weapons of war; oil revenues, a measure of battlefield endurance. Ukraine is thus not only a territorial conflict, but a struggle over the energy arteries of Eurasia.

Across the Atlantic, Washington’s renewed engagement with Venezuela tells a similar story. For years, Caracas was a pariah – its vast oil reserves trapped under sanctions and mismanagement. As global supply tightened after Ukraine, Venezuelan crude regained strategic relevance. Sanctions were selectively eased; diplomatic channels reopened. The message was unmistakable: values matter, but barrels matter more. Oil does not just power economies; it reorders moral priorities.

In the Middle East, oil has never ceased to be political gravity. Every escalation, whether involving Israel, Iran, or the Gulf, sends tremors through energy markets. The Strait of Hormuz remains the world’s most perilous energy chokepoint, where a single miscalculation could send prices soaring and economies reeling. The shadow war between Iran and the United States, conducted through sanctions, proxies, and cyberattacks, is fundamentally about who controls the terms of energy access in West Asia.

Even the rivalry between the US, Russia, and China is, at heart, an energy triangle. China’s rise rests on assured access to hydrocarbons; its Belt and Road Initiative quietly traces energy corridors across Central Asia, the Middle East, and Africa. Russia seeks to monetise its oil and gas eastwards as Western doors close. The US, the world’s largest oil producer, wields energy abundance as strategic insulation – less vulnerable to external shocks, more willing to use sanctions as instruments of statecraft.

What makes this moment distinct from the twentieth century is not oil’s disappearance, but its entanglement with transition politics. The world is trying to leave oil behind, but cannot function without it. Underinvestment in oil and gas – driven by climate imperatives and ESG pressures – has tightened supply faster than demand has fallen. The result is a market prone to shocks, where conflicts translate swiftly into price spikes. Paradoxically, the energy transition has made oil geopolitics more volatile.

For the global order, this signals a return to resource realism. Multilateralism strains when energy scarcity looms. Sanctions fragment markets into political blocs. Energy nationalism – once thought passé – reasserts itself. Strategic reserves are stockpiled, supply chains re-shored, and alliances recalibrated around energy dependencies.

The challenge for India

India’s predicament is acute and revealing. As one of the world’s fastest-growing energy consumers and a net importer of oil, India sits at the crossroads of every major energy conflict. High oil prices widen fiscal deficits, stoke inflation, and strain household budgets. Yet India has demonstrated quiet strategic pragmatism – buying discounted Russian oil while maintaining partnerships with the West, deepening ties with the Gulf while navigating tensions with Iran. This is not fence-sitting; it is energy realism.

For India, the return of the oil conflict underscores three imperatives. First, diversification is destiny, not merely in sources, but in fuels. Renewables, nuclear, biofuels, and electric mobility are not climate luxuries; they are geopolitical hedges. Second, diplomacy must remain supple. Energy security is inseparable from foreign policy, and India’s ability to talk to all sides is strategic necessity, not moral ambiguity. Third, India must recognise that oil politics will coexist with the energy transition for decades. Planning on the assumption of a rapid, frictionless exit would be a strategic error. The future will be hybrid, contested, and unstable.

Yergin once wrote that oil brings out both the best and the worst in human affairs – great progress and greater greed. That duality has returned with force. Oil is no longer just a fuel; it is a fault line. For fragile economies, volatility now acts like a hidden tax, transmitted through inflation, currency pressure, and social unrest. Even as we speak of green futures, the old black gold continues to cast a long, combustible shadow.

The age of oil never really ends. It merely waits for its moment to return. The security implications of black gold conflict should serve as a cautionary tale for India, one that the government must take seriously.

(The writer is Director, School of Social Sciences, Ramaiah University of Applied Sciences)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.