The transition from fossil fuels to renewable energy sources constitutes one of the most consequential geopolitical shifts since the advent of the petroleum age. For over a century, control over oil and gas reserves has shaped international relations: wars have been fought over fields and pipelines, alliances forged around energy security, and entire national economies built on hydrocarbon exports. Now this architecture is being dismantled—not by conquest but by technology, policy, and market forces. The question is not whether this transition will transform global power relations, but how, and to whose benefit.
The New Geography of Energy¶
The fossil fuel era concentrated power in specific geographies: the Persian Gulf, Russia, Venezuela, and a handful of other hydrocarbon-rich regions. These states derived enormous leverage from their resources, funding military buildups, purchasing diplomatic influence, and in some cases using energy supplies as instruments of coercion. The geography of renewable energy is fundamentally different.
Solar and wind resources are far more evenly distributed than oil and gas deposits. Most countries possess some capacity for renewable generation. This diffusion suggests a more democratic energy future in which fewer states can exercise supply leverage. Yet the transition does not eliminate geographic concentration—it merely relocates it. The critical chokepoints of the clean energy economy lie not in oil fields but in mines, processing facilities, and advanced manufacturing centers.
Critical minerals have become the strategic resources of the energy transition. Lithium powers electric vehicle batteries; cobalt enhances their stability; rare earth elements are essential for wind turbines and electric motors; copper wires the entire system together. The extraction and processing of these materials is concentrated in a small number of countries, creating new dependencies that may prove as consequential as twentieth-century oil dependence.
The Democratic Republic of Congo produces approximately 70 percent of global cobalt; Chile and Australia dominate lithium extraction; South Africa holds most platinum group metals. But extraction is only part of the picture. The processing and refining of these materials—transforming raw ore into battery-grade chemicals—is even more concentrated, and here one country stands apart.
China’s Commanding Position¶
China has positioned itself as the indispensable nation of the energy transition. Through deliberate industrial policy sustained over two decades, Beijing has achieved dominance across the clean energy supply chain that dwarfs any single country’s influence over oil markets.
Chinese firms process approximately 60 percent of global lithium, 70 percent of cobalt, and over 85 percent of rare earth elements. China manufactures roughly 80 percent of the world’s solar panels and dominates battery production for electric vehicles. This position was not accidental but resulted from strategic investment, state subsidies, favorable regulations, and willingness to accept environmental costs that other nations refused.
The implications for geoeconomic competition are profound. Western nations pursuing decarbonization face a structural dilemma: the faster they transition, the more dependent they become on Chinese supply chains. This dependency creates potential vulnerabilities analogous to European reliance on Russian gas—a reality that became painfully clear when Moscow weaponized energy supplies following its 2022 invasion of Ukraine.
China has already demonstrated willingness to use mineral dominance for political purposes. In 2010, Beijing restricted rare earth exports to Japan during a maritime dispute. In 2023, China imposed export controls on gallium and germanium—critical materials for semiconductors and solar panels—following American technology restrictions. These actions signal that mineral supply chains may become instruments of statecraft.
The response from Western capitals has been a belated scramble to diversify supply chains and develop domestic processing capacity. The United States Inflation Reduction Act, the European Critical Raw Materials Act, and similar initiatives in Japan, South Korea, and Australia all aim to reduce reliance on Chinese mineral processing. Yet building alternative supply chains requires years of investment, permitting, and construction. China’s head start of two decades cannot be easily overcome.
The Petrostates Under Pressure¶
If the energy transition empowers mineral-rich nations and clean technology leaders, it poses existential questions for states whose economies depend on hydrocarbon exports. Russia, Saudi Arabia, the Gulf states, Venezuela, Nigeria, Algeria, and other petrostates face a future in which their primary source of wealth and influence gradually diminishes.
The timeline remains contested. Oil demand may plateau in the 2030s or persist longer; natural gas may serve as a transition fuel for decades; petrochemical feedstocks will remain necessary even as transportation electrifies. But the direction is clear. The question for hydrocarbon exporters is how to adapt.
Russia presents the most acute case. Hydrocarbons constitute roughly 40 percent of federal budget revenue and over half of export earnings. The combination of energy transition pressures, Western sanctions following the Ukraine invasion, and structural underinvestment in the Russian energy sector suggests a future of constrained resources and diminished influence. Moscow has pivoted toward Asian markets, particularly China and India, but at reduced prices and from a position of weakness. Russia’s long-term trajectory as a great power depends significantly on whether it can diversify its economy before hydrocarbon revenues collapse.
Saudi Arabia has launched Vision 2030, an ambitious program to develop non-oil sectors including tourism, entertainment, technology, and renewable energy. The Kingdom plans massive solar installations in its deserts and investment in hydrogen production. Whether these initiatives can replace oil revenue remains uncertain, but Riyadh at least recognizes the challenge.
Smaller petrostates face grimmer prospects. Nations lacking the financial reserves, human capital, or geographic advantages of the Gulf monarchies may experience severe economic contraction and political instability as hydrocarbon demand declines. The geopolitical implications of failing petrostates—migration pressures, terrorism, regional conflicts—could prove as disruptive as the transition itself.
European Energy Security Transformed¶
No region has experienced the geopolitics of energy more dramatically than Europe. The 2022 Russian invasion of Ukraine—and Moscow’s subsequent weaponization of gas supplies—forced a fundamental restructuring of European energy policy. Decades of assumptions about the stabilizing effects of energy interdependence collapsed within months.
Before the invasion, Russia supplied roughly 40 percent of European gas imports. The pipeline infrastructure built since the 1970s created what European policymakers assumed was mutual dependence: Russia needed European markets as much as Europe needed Russian gas. This assumption proved catastrophically wrong. Moscow demonstrated willingness to sacrifice energy revenues for strategic objectives, and Europe found itself scrambling for alternative supplies.
The European response has been remarkable in speed if not elegance. Liquefied natural gas imports surged, primarily from the United States, Qatar, and Algeria. Storage facilities were filled ahead of winter. Consumption fell through conservation measures and demand destruction. New pipeline interconnections were fast-tracked. The result: Europe survived the winter of 2022-23 without the energy crisis that many predicted.
But this adaptation came at enormous cost. Energy prices spiked, contributing to inflation and economic strain. Energy-intensive industries relocated or closed. The EU’s dependence shifted from Russian pipelines to LNG tankers and the countries that fill them. Strategic autonomy in energy remains elusive.
The crisis has accelerated European renewable deployment. Solar and wind installation rates have increased sharply. The logic is straightforward: domestically generated renewable energy reduces reliance on imports of any kind. Yet the transition creates new dependencies on Chinese-manufactured components and critical minerals. Europe has traded one vulnerability for another, though arguably for one with more diversification potential.
New Energy Alliances¶
The energy transition is reshaping alliance structures and diplomatic relationships. Traditional energy partnerships—the United States and Saudi Arabia, Europe and Russia—are weakening or transforming. New configurations are emerging.
Mineral diplomacy has become a focus of statecraft. The United States has negotiated critical mineral agreements with allies including Japan, Australia, and the United Kingdom. The EU has pursued “strategic partnerships” with resource-rich nations in Africa and Latin America. These agreements aim to secure supply chains outside Chinese control while offering development financing and technical assistance.
Technology transfer coalitions are forming around clean energy innovation. The trilateral AUKUS partnership, initially focused on nuclear submarines, has expanded to include advanced technologies with energy transition relevance. The Quad (Australia, India, Japan, United States) coordinates on supply chain resilience and critical technology development.
South-South energy cooperation is accelerating as developing nations seek alternatives to Western and Chinese dominance. BRICS expansion includes discussion of energy cooperation mechanisms. Regional initiatives in Africa and Southeast Asia aim to develop renewable capacity through mutual assistance rather than dependence on great powers.
The Global South’s position in the energy transition remains contested. Many developing nations possess the minerals essential for decarbonization but lack the processing capacity to capture value domestically. They risk becoming commodity suppliers in a new extractive relationship, trading colonial-era dependencies on agricultural exports for twenty-first-century dependencies on mineral exports. Voices from these regions increasingly demand technology transfer, processing investment, and climate finance as conditions for participating in the transition.
Climate as Geopolitics¶
The energy transition cannot be separated from its driving force: climate change. The geopolitical consequences of a warming planet interact with and amplify transition dynamics.
Climate vulnerability varies enormously by geography. Island nations face existential threats from sea level rise. Water-stressed regions from the Middle East to Central Asia confront declining agricultural productivity. The Arctic is transforming from frozen barrier to contested waterway. These differential impacts create new sources of conflict and cooperation.
Climate finance has become a major issue in international relations. Developing nations argue that wealthy countries, responsible for most historical emissions, owe compensation and assistance for adaptation and transition. The failure to deliver promised climate finance erodes trust and complicates negotiations on everything from trade to security.
Climate migration will reshape demographic and political landscapes. Estimates of climate-driven displacement range into the hundreds of millions by mid-century. The receiving regions for these populations will face integration challenges; the sending regions will lose human capital. Both dynamics carry geopolitical implications.
Climate negotiations themselves have become arenas of great power competition. China’s position as both the world’s largest emitter and the dominant clean technology manufacturer gives Beijing significant leverage. American credibility on climate varies with domestic politics. European leadership aspirations depend on demonstrating that decarbonization and prosperity can coexist.
The Transition’s Uncertain Trajectory¶
Several factors will determine how energy transition geopolitics unfolds:
Technology trajectories remain uncertain. Breakthroughs in battery chemistry could reduce dependence on cobalt and lithium; advanced nuclear designs might provide baseload power without intermittency concerns; green hydrogen could decarbonize sectors resistant to electrification. Each scenario implies different geographic winners and losers.
Policy durability is not guaranteed. Climate commitments can be reversed by successive governments, as American oscillation between Paris Agreement participation and withdrawal demonstrates. Economic downturns may prompt backsliding on transition timelines. The politics of decarbonization remain contested in most democracies.
Incumbent resistance will continue. Hydrocarbon producers retain enormous financial resources and political influence. They will deploy these assets to slow the transition, protect market share, and shape successor arrangements. OPEC’s production decisions continue to influence global energy markets, even as the cartel’s long-term relevance diminishes.
Geopolitical shocks could accelerate or derail transition timelines. Conflict in the Taiwan Strait would disrupt semiconductor supply chains essential for clean technology. Instability in major mineral-producing regions could trigger supply crises. Conversely, energy security crises—like Europe’s 2022 experience—may accelerate domestic renewable deployment.
The geopolitics of energy transition represents not a replacement of the old order but a layering of new competitions onto existing ones. Fossil fuels will remain significant for decades; their decline creates instability as exporters adapt or fail. Simultaneously, new strategic resources—lithium, rare earths, processing technology—create fresh vulnerabilities and power concentrations. Navigating this dual transition—managing the decline of the old energy order while building the new—constitutes one of the defining challenges of twenty-first-century statecraft.