Global energy security and geopolitical disruptions

Global energy security is being challenged by geopolitical tensions, infrastructure vulnerabilities, and shifting trade policies. In the United States, new legislation allows for tariffs of up to 100% on nations purchasing Russian oil and gas, a move intended to increase economic pressure on Russia but one that threatens trade flows for major importers like India and China. India, which maintains an 88% dependency on crude oil imports, has increasingly relied on discounted Russian supplies, which accounted for approximately 50.8% of its oil imports as of July 2026.

Geopolitical conflicts have contributed to market volatility and supply disruptions. Military actions involving the US, Israel, and Iran have impacted the Strait of Hormuz, with the International Energy Agency estimating cumulative supply losses of 1.3 billion barrels of oil. Additionally, attacks on infrastructure in Qatar have driven price surges.

In the United Kingdom, infrastructure failures, such as an electrical fire at the North Hyde Substation that caused a full-day closure at Heathrow Airport, have heightened resilience concerns. The UK government is addressing these weaknesses by accelerating the transition to zero-carbon electricity while utilizing domestic oil and gas to safeguard sovereign capability.

In response to these vulnerabilities, nations are pursuing different resilience strategies. Ukraine has moved toward decentralized energy, utilizing Chinese-made solar panels and batteries to mitigate the impact of attacks on its centralized power grid. Meanwhile, there is a renewed global interest in nuclear energy as a stable, low-emissions source, though the International Atomic Energy Agency notes that long lead times prevent it from being an immediate solution to current crises.