Geopolitical rivalry deepens energy vulnerability amid rising global demand

At the opening of Russian Energy Week 2025, energy leaders from around the world convened in Moscow to assess the state of global energy security against a backdrop of growing demand and intensifying geopolitical competition. The message was unmistakable: the world faces a paradox where energy consumption grows steadily, yet increasing politicisation and sanctions threaten supply stability, echoing tensions not seen since the Cold War.

Deputy Prime Minister Alexander Novak of Russia underscored the relentless rise in energy consumption, with electricity demand expanding annually by 4.3%—outpacing overall economic growth. Oil and gas, far from declining, remain indispensable pillars of the global energy mix, particularly in the Asia-Pacific region. Novak issued a stark warning: the combination of under-investment in hydrocarbons and escalating geopolitical frictions risks creating a supply shortfall that could imperil economic growth worldwide.

Sanctions Weigh Heavily on Energy Investment and Stability

This risk is vividly illustrated by Venezuela’s stark revelations. Executive Vice President and Minister of Hydrocarbons Delcy Eloina Rodriguez Gomez exposed a sobering reality: more than one-quarter of the world’s oil production—26%—and 43% of known reserves are currently under restrictions. This vast swath of restricted energy resources constrains investment and jeopardizes the capacity to meet future demand increases, threatening market stability.

Such geopolitical fragility is manifest in a variety of flashpoints. Venezuela itself faces persistent U.S. military threats and economic pressures. Meanwhile, Ukrainian strikes on Russian energy infrastructure—actions reportedly enabled by U.S. intelligence—highlight the growing militarisation of energy assets. Diplomatic and economic pressures further complicate efforts to forge new energy agreements, as exemplified by U.S. resistance to the Turkmenistan-Iran-Iraq gas swap deal. Recent U.S. sanctions targeting a Chinese import terminal receiving Iranian oil add yet another layer to this intricate web of restrictions.