Energy security has always been deeply intertwined with geopolitics. The oil shocks of the 1970s reshaped the global energy system. The 1973 oil embargo, imposed by the Arab members of the Organisation of the Petroleum Exporting Countries (OPEC), triggered the 1973 Oil Crises, quadrupling energy prices and wreaking havoc in the global economy. In response, major oil consuming countries established the International Energy Agency (IEA) in 1974, encouraging the establishment of strategic petroleum reserves (SPRs) and coordinated emergency responses to manage supply disruptions.
The current United States-Israel-Iran conflict around the Strait of Hormuz represents another significant inflexion point for the global energy system. Both transportation channels and energy infrastructure are increasingly attacked and weaponised. Since mid-December 2025, Brent crude prices have surged more than 100% reaching its peak last week at USD 119 per barrel. The disruption of the strategic passage - through which roughly one-fifth of global energy supplies transit - have sent ripple effects across food prices, commodity markets and stock exchanges.
The IEA and G7 declaration to release 400 million barrels of oil has done little to stabilise markets or assuage investors. The oil prices continues to sit firmly in triple digits. The ongoing crisis underscores a crucial reality - that energy security cannot be viewed with the myopic lens of supply availability and price stability alone. It is shaped by not only demand supply dynamics but also geopolitical signals, logistical chokepoints, financial exposure and technological vulnerabilities.
Much like the recalibration that followed the oil shocks of the 1970s, this conflict is likely to compel governments and institutions alike to rethink how energy security is defined and managed in the twenty first century. Future strategies will need to increasingly adopt a broader risk-management paradigm spanning across financial systems, supply chains, infrastructure protection, and geopolitical uncertainty.
India: A Case in Point
These dynamics are particularly relevant in the case of India. Given the geographical proximity and historically reliable supply, the Middle East has long been a steadfast partner for India's growing energy needs. Today, India imports 40% of its crude oil and 60% of its natural gas from the region. However, the ongoing crises around the Strait of Hormuz highlights the depth of this dependence and vulnerabilities inherent in such concentrated exposure.
India has made significant progress in diversifying its crude oil sourcing - from nearly 40 countries - and maintains modest reserves of around 50 days of crude oil and refined products in pipelines, offshore vessels, above ground tanks within its distribution network. However, the situation is far more constrained in the gas markets. In addition to significant natural gas imports, nearly 90% Liquified Petroleum Gas and Natural Gas Liquids imports originate from the Middle East.
Supply shortages inevitably translate to higher energy prices - and here lies the double whammy. Elevated energy prices depreciate the currency, coupled with widening current account deficit and weak capital inflows, increase the risk of stagflation. Estimates suggest that if oil prices continue to rise towards USD 100 per barrel, India's current account deficit could likely move towards 3% of GDP as opposed to baseline forecasts of 1.5% of GDP.
Energy security, therefore, is not merely a question of supply but a matter of national and economic security.
The Trifecta
The lessons learnt from the emerging crises point to the need for a more comprehensive framework for energy security - one that balances securitisation, resilience, and the transition: what might be called the trifecta of energy security.
At the core of this framework is securitisation and risk management, which will become central to protecting energy systems from future geopolitical and supply chain shocks. Much like a carbon price, energy markets may soon incorporate a permanent security premium, reflecting exposure to geopolitical realities and infrastructure risks.
The first dimension is physical. Countries will to need to strengthen their oil and gas stockpiles to prepare for contingencies in an increasingly volatile world. Global oil demand continues to exceed 105 million barrels per day sustained by sectors including transport, aviation, petrochemicals and hard to abate industries. Besides reserves, energy infrastructure of national strategic importance - such as powerplants, refineries, LNG terminals, electricity transmission networks, pipelines - should be treated as critical national security assets with protections comparable to military installations.
The second dimension is digital. In an increasingly techno-digital era, warfare is not confined to the physical battlefield anymore, but also extends to the cyberspace. Therefore, strengthening cybersecurity defences across energy systems is essential, as demonstrated by the Russian cyberattacks of three power distribution companies in Ukraine in 2015 and 2016, which caused localised electricity blackouts.
Ukraine wartime experiences offer several valuable lessons in this regard: diversification and decentralisation of energy infrastructure; maintaining strategic stockpiles of fuel and critical components; protecting energy infrastructure through physical and military defences; and strengthening digital and cybersecurity components.
Resilience
Beyond securitisation and protection, building resilience through decentralisation and diversification of energy sources, trade routes and partnerships will become key to ringfencing the energy systems from volatile pricing and sudden supply chain disruptions. Alternative pathways and corridors, such as the India Middle East Europe Corridor proposed during India's G20 Presidency, the emerging Eastern Mediterranean gas networks, the Euro Asia interconnectors, the Lobito Corridor in Africa, Arctic energy and shipping corridorsm are all examples of efforts already underway.
The Russia Ukraine war was an eye-opening moment for Europe, exposing the risk of dependence on a single supplier - Russia - for its gas imports. The crises in Hormuz could serve as the impetus to accelerate diversification efforts to build a robust and resilient web of networks and channels for energy cooperation. Diplomatic cooperation and strategic partnerships will be key to achieving these goals.
Decentralisation or distributed generation - rooftop solar, microgrids and localised storage - will reduce reliance on single points of failure such as one long transmission network or large centralised power plants. This will make the energy system more flexible and resilient to conflict, cyberattacks or supply shocks.
At the same time, resilience will depend on systems capability. This included strengthening capabilities in maritime monitoring, satellite surveillance, market data analytics, commercial licensing, contractual compliance, port security, payment systems, risk shipping insurance, reinsurance mechanisms, contract enforcement and real-time supply chain intelligence.
Transition
Finally, the energy transition agenda - closely tied to energy sovereignty- must be viewed as a pillar of long-term energy security. Investments in in renewables plus storage, nuclear energy, and grid optimisation are likely to gain momentum.
Following the energy crises triggered by Russian invasion of Ukraine, investments in clean energy and technologies increased in Europe, reflecting an effort to secure control over domestic energy infrastructure. Similar trends are likely to unfold again.
While the proponents of "Drill Baby Drill" campaign emphasise energy dominance through fossil fuel expansion, leaders around the world, including in India, South Korea and Europe, have called for less dependence on fossil imports while accelerating electrification, renewables and efficiency. Renewables have become cheaper to their fossil fuel counterpart and present a safer, sustainable, and faster-to-market alternative.
However, critical minerals - essential ingredients for the clean energy technologies - are, much like oil and gas, concentrated in a few geographies. The processing and refining of these critical minerals is even more concentrated - China refines 90% of the graphite and rare earth minerals and 60% of global lithium and cobalt. Ac countries move away from fossil fuels, they should avoid replacing old dependencies with new ones.
Securing strategic reserves of crucial critical minerals - through domestic exploration and overseas mineral resource development cooperation and repatriation, along with development of domestic processing capacities - will be key to avoiding such vulnerabilities.
The energy security architecture must be rethought and rebuilt - one that integrates securitisation of critical infrastructure, resilience through decentralisation and diversification of energy sources, trade corridors and partnerships, and an accelerated energy transition aimed at both reducing exposure and building buffers to volatile fuel markets and global disruptions.
(Mannat Jaspal is Director & Fellow, Climate and Energy, ORF Middle East)
Disclaimer: These are the personal opinions of the author
