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Opinion
Oil still runs the world, but its role in geopolitics is changing
Demand from China and the rest of the world ensures its impact on diplomacy and markets, but there’s no question its supremacy is waning
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James David Spellman, a graduate of Oxford University, is principal of Strategic Communications LLC, a consulting firm based in Washington, DC.
China and the rest of the world remain thirsty for oil. That means the commodity’s central and volatile role in geopolitics continues, with decades-old realities driving economics, trade, alliances and conflicts for the countries dependent on fossil fuels. Yet, change lies ahead.
Last month’s short-lived rally underscores oil’s mercurial clout. Brent crude hit a four-month high of US$82 a barrel after the United States expanded sanctions on Russia and Iran. Oil-supply news shocks continue to have an immediate and enormous impact on the global economy; other policy shifts such as tariff increases matter too.
Meanwhile, after years of production cuts, Opec+ members refuse to ramp up supplies before April, if even then. US President Donald Trump wants America to “drill, baby, drill”, thereby forcing prices down to the detriment of oil-producing states like Russia and Saudi Arabia. While traders remain hopeful that Beijing’s stimulus, including the first easing of monetary policy in 14 years, will boost China’s appetite for oil, an unsteady, tepid recovery might persist.
Global oil consumption is likely to peak by 2030, assuming that the world remains roughly the same, the International Energy Agency forecasts. On the other hand, the Organisation of Petroleum Exporting Countries does not see peak oil happening any time soon.
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