Navigating Global Turmoil
NATO's Evolving Role and the Shifting Geopolitics of Oil
The global landscape is in constant flux, shaped by dynamic political alliances, escalating conflicts, and the ever-present demand for energy. At the heart of this intricate web are organisations like the North Atlantic Treaty Organisation (NATO), a pivotal transatlantic security alliance, and the volatile market of oil, whose geopolitics have been profoundly reshaped by recent events.
Understanding these interwoven elements is crucial to comprehending the present and future of international relations and global news.
This article explores the enduring legacy and evolving mission of NATO, from its Cold War origins to its renewed focus on deterring Russian aggression, including its expansion and the critical discussions surrounding defence spending.
Concurrently, it delves into the complex geopolitics of oil, analysing how Russia's war in Ukraine has remapped global energy security, influenced OPEC+ decisions, and accelerated the urgent yet challenging energy transition.
Through expert perspectives and factual analysis, we aim to provide a comprehensive view of these two pillars of global stability and the profound challenges they face.
NATO's Enduring Legacy and Evolving Mission
Founded in 1949, NATO emerged as a transatlantic security alliance with a clear purpose: to act as a bulwark against Soviet aggression. Its core mission, rooted in Article V of the North Atlantic Treaty, declares that “an armed attack against one or more [member states] in Europe or North America shall be considered an attack against them all”.
This principle has been the "pillar of U.S.-Europe military cooperation" for seventy-six years, embodying a commitment to collective defence.
A Post-Cold War Pivot
Beyond Collective Defence
Following the demise of the Soviet Union in 1991, NATO leaders engaged in intense debates about the alliance's future direction. Many U.S. officials advocated for NATO to look "beyond its core defense commitments" and address new security problems that lay outside its then-current borders, particularly in Europe.
The breakup of Yugoslavia in the early 1990s and subsequent ethnic conflicts immediately tested this new vision. What began as a UN-sanctioned no-fly zone mission over Bosnia and Herzegovina evolved into a bombing campaign against Bosnian Serb forces, which military analysts consider essential to ending the conflict. In April 1994, NATO conducted its first combat operations, shooting down four Bosnian Serb aircraft.
The alliance's adaptability was further demonstrated following the 9/11 attacks by al-Qaeda, based in Afghanistan. NATO invoked Article V for the first and only time, leading to a mission in Afghanistan that, at its height, involved more than 130,000 troops from fifty alliance and partner countries. This mission, which lasted twenty years until 2021, signalled NATO's adaptation to the post-Cold War security environment.
Expansion of NATO
The idea of expanding NATO membership to extend its security umbrella eastward, however, was not without controversy. Initially, some in the Bill Clinton administration opposed expansion, wary of upsetting relations with President Boris Yeltsin’s fragile government in Russia. After the launch of the Partnership for Peace in 1994—a non-membership framework designed for cooperation with former Warsaw Pact members and non-European countries to allay Russia’s concerns—Clinton pivoted to advocating for membership expansion.
This shift prompted Yeltsin to warn of a "cold peace" in Europe. Indeed, Moscow has long viewed NATO's post-Cold War expansion into Central and Eastern Europe with great concern, seeing it as a betrayal of alleged U.S. guarantees not to expand eastward after Germany's reunification in 1990, a characterization U.S. officials dispute.
Many Western leaders recognised the risks, with U.S. Secretary of State Warren Christopher writing in 1994 that "Swift expansion of NATO eastward could make a neo-imperialist Russia a self-fulfilling prophecy".
Despite reconciliation efforts, including the 1997 Founding Act, relations remained plagued by a persistent lack of trust. The 2008 Bucharest summit, where NATO vowed to support future membership for Georgia and Ukraine despite Russia's warnings, deepened suspicions. Russia's invasion of Georgia that summer underscored Moscow's intent to protect its perceived sphere of influence.
Further spoiling relations were Russia's annexation of Crimea in 2014 and its continued destabilisation of eastern Ukraine, leading NATO to suspend all civilian and military cooperation with Moscow. Tensions escalated in late 2021 and early 2022 when Russia demanded a halt to NATO expansion and military deployments, requests dismissed by alliance leaders, culminating in the full-scale invasion of Ukraine in February 2022.
Russia's Invasion of Ukraine
A Catalyst for Change in NATO and Global Security
Russia’s "unprovoked invasion of Ukraine, a nonmember, in early 2022 shook Europe’s security architecture" and compelled a major reevaluation of NATO members’ foreign policies and defence commitments. This conflict, the largest land war in Europe since World War II, has generated the greatest tensions between Russia and the alliance in the post–Cold War era, pushing NATO to reaffirm its focus on deterring Russian aggression.
A significant consequence has been a sharp increase in defence spending among NATO members. For years, many members failed to meet the 2 percent of gross domestic product (GDP) defence spending target agreed upon in 2014. However, Russia's 2022 invasion sparked a change: in 2024, twenty-three of the alliance’s thirty-two members met or exceeded this target, a substantial increase from just six in 2021. Germany, for example, pledged €100 billion to boost weapons investments and successfully met the 2 percent target by January 2025. While U.S. officials have long criticised European members for failing to meet their budget commitments, U.S. President Donald Trump has taken a more assertive approach, suggesting his administration would reexamine U.S. treaty obligations and calling for NATO members to increase their defence spending contributions to 5 percent of their GDP, with 3.5 percent for core defence and 1.5 percent for defence-related expenditures.
The perceived threat from Russia also directly led to two traditionally non-aligned Nordic countries seeking and gaining full membership. Finland acceded to NATO in April 2023, expanding NATO’s Nordic footprint and doubling the length of its border with Russia. Sweden's bid, initially delayed by political disputes, was finalised in March 2024, making it the alliance's newest member.
Years of Russian aggression have pushed NATO to reinforce defences on its eastern flank. Since its 2014 summit in Wales, NATO has ramped up military exercises and established new command centres in Bulgaria, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, and Slovakia. These outposts are intended to support a rapid reaction force of about twenty thousand, with a potential for forty thousand in a major crisis. In 2017, NATO began rotating four multinational battle groups through the Baltic states and Poland, bolstered defences in the Black Sea region, and increased air patrols over its eastern borders, routinely scrambling jets to intercept Russian warplanes. The U.S. Army also added another rotational armoured brigade to the region.
While Ukraine is not a member, NATO countries have provided unprecedented military support, including sophisticated weaponry such as tanks, heavy artillery, armed drones, and anti-aircraft systems. However, this lethal aid is "not committed under alliance auspices," as NATO leaders have been keen to avoid actions that could draw them into direct conflict with Russia or escalate hostilities, despite Russia's warnings of a nuclear war risk.
The future of support for Ukraine and the alliance's collective defence posture remain central concerns. Since Trump’s return to office in January 2025, the United States has softened its support for Ukraine, temporarily pausing some military aid and exerting more pressure on Kyiv than Moscow for concessions to secure a ceasefire. U.S. Defense Secretary Pete Hegseth dismissed Ukraine’s NATO accession and ruled out a U.S.-led peacekeeping mission in Ukraine.
These developments coincide with internal divides within NATO, with members like Hungary and Slovakia expressing opposition to Ukraine’s full membership. Trump's mutable support for NATO's collective defence tenets, suggesting in March 2025 that the U.S. would not defend member states not contributing enough to defence spending, adds further complexity.
The upcoming 2025 summit in The Hague, Netherlands, from June 24–26, will address these major areas of concern: defence spending, support for Ukraine, and the alliance’s defence posture. NATO chief Mark Rutte anticipates the alliance will approve a four hundred percent increase to NATO’s air and missile defences during the summit to guard against potential future attacks. Ukrainian President Volodymyr Zelenskyy has been invited and is expected to attend, underscoring NATO's continued close relationship with Ukraine.
The Geopolitics of Oil
Upended by Conflict and Transition
The ongoing conflict in Ukraine has not only reshaped NATO but has also profoundly impacted the geopolitics of oil, creating a "remapping" of global energy flows. Carolyn Kissane, academic director and clinical professor at the Center for Global Affairs at New York University, highlighted in a Council on Foreign Relations academic webinar that Russia's reinvasion of Ukraine "very much upended the geopolitics of oil".
Russia, being one of the top three global oil producers, played a significant role, and its actions have led to shifts in how countries perceive oil security in light of broader energy security questions, coupled with the ongoing energy transition and the need to decarbonise.
Global Oil Consumption and Demand
An Expanding Landscape
A critical, often overlooked, aspect of global energy security is the sheer volume of oil consumed daily. Kissane pointed out that the world consumes over 100 million barrels of oil per day, all of which must be moved through the global system to its destinations. Contrary to what some might expect given climate concerns and the push for decarbonisation, there is currently "not seeing a reduction in demand, but we’re seeing an expansion in demand".
Much of this global demand growth is emanating from Asia, with the reopening of China posing "lots of really interesting questions as to what oil demand will be in China for the 2023-2024 years". China's accumulated savings and potential "revenge tourism" after three years of lockdown could significantly impact global demand.
OPEC+ Decisions and Market Volatility
Decisions by OPEC+, which now includes Russia, Kazakhstan, and Mexico alongside traditional OPEC members, have a direct and immediate impact on oil prices. Last week's decision by OPEC+ to reduce production by 1.2 million barrels a day, at a time of tight supply rather than excess, "came as a bit of a surprise to even the most longstanding analysts and OPEC observers". This reduction immediately caused an "uptick in the price," stabilising around $80-plus-a-barrel.
Such moves create uncertainty for the global economy, especially for countries experiencing or entering recessions, risking "more energy inflation". The Biden administration expressed disappointment, recognising the self-interests of producers like Saudi Arabia, the largest producer within OPEC, which produces 10 to 11 million barrels a day.
Global Energy System and Regional Dynamics
The global energy system is profoundly interconnected. While some countries are "very well resourced-endowed" with oil, others must import it, as "there’s really no country in the world that doesn’t need oil for larger national security issues". The top three oil producers globally are the United States, Saudi Arabia, and Russia, with Canada and China also being significant producers.
The United States also includes gas liquefied (liquid petroleum) in its figures, being well-endowed with both oil and natural gas. The top oil-consuming countries are the U.S., China, and India, with China now holding the position of the largest importer, though the U.S. consumes over 20 million barrels a day.
Despite sanctions, Russia continues to produce and sell its oil. Fourteen months into its reinvasion of Ukraine, Russia's overall production and exports were, at some points, even higher than pre-invasion levels. This is due to new countries, such as Turkey, Singapore, China, and India, buying discounted Russian oil.
Russia has been finding "different ways" to move its oil, including utilising the East Siberian Pipeline to China and employing "shadow tankers". While sanctions were carefully implemented to avoid massive global economic disruption—given Russia exports about 7 million of its over 10 million barrels a day—Russia's need for revenue to fund its expensive war means it finds ways to get its oil out.
Approximately "over 75 percent of the world’s oil is controlled, managed by state-owned oil companies," such as Saudi Aramco and PDVSA of Venezuela. These national oil companies (NOCs) are crucial to understanding the geopolitics of oil, with their decisions often driven by state budget concerns, reflecting a desire for more revenues.
The shift in oil trading, which historically occurred in Europe, has moved to other regions, with Russia setting up trading houses to bypass sanctions compliance, sometimes selling discounted oil that is then re-exported, as seen with Malaysia. China and India have particularly taken advantage of discounted Russian oil, using it for both domestic consumption and to enhance their refining capacity for re-export as petroleum products.
The Energy Transition, Climate Change, and Economies
The persistent high consumption of oil, despite the Paris Climate Agreement of 2015, raises questions about its effectiveness. Kissane noted that while BP scenarios project peak oil demand before 2030, others contest this, suggesting it will happen later. The speed of transition away from oil is critical, but oil's use extends beyond the transportation sector to petrochemicals and fertilisers, making its reduction across the global system challenging. Even during COVID-19 lockdowns, the reduction in demand was less than ten million barrels, highlighting the difficulty of significantly cutting consumption.
Efforts related to the Paris Agreement now focus on reducing emissions from oil production itself, with companies exploring carbon capture and sequestration. Some countries, like Saudi Arabia, are marketing "low-emission oil," reflecting a growing competition to demonstrate lower carbon emissions in production. Despite these efforts, fossil energy demand has not seen a reduction, and while Europe seeks to hasten its energy transition by building more renewable energy and promoting electric vehicles, "big swaths of the world" are still seeing, and will continue to see, higher demand as their economies grow.
The energy transition presents particular challenges for developing economies, especially on the African continent. Many African countries, such as Nigeria, have oil reserves and are producers, but face "above-ground risks" and the need for new infrastructure investment. A significant issue is that many Western governments and financial institutions have pledged not to invest in new fossil fuel projects, which is problematic for African countries that "still don’t have 100 percent energy access". This raises questions of "hypocrisy" when comparing the funding history of Western banks in developed economies versus their current restrictions on African projects, despite Africa's resources and need for economic growth. New oil demand is increasingly coming from Asia and Africa, underscoring the critical need for "energy security" in these regions—ensuring accessibility, reliable sources, and affordable prices—without a "whole-of-energy approach".
Venezuela, despite having the "largest reserves in the world," faces immense challenges. Its politics and lack of international oil service providers have severely hampered its production capacity. While the U.S. has granted Chevron a sanctions exemption, widespread reinvestment in its old infrastructure is needed to meet its potential of producing 2 million-plus more barrels per day. Furthermore, Venezuelan oil is "very, very heavy," associated with "very large carbon emissions," making it difficult for the country to market itself as a low-emission producer in a global context increasingly focused on environmental impact. China, an oil-producing country itself, has seen "peak supply" over the last decade, with year-on-year reductions in its producing capacity. Challenges in replicating the U.S. shale oil revolution due to geological and logistical constraints mean that while there might be potential for reserves in the South China Sea, extraction is not imminent.
European Green Deal and Nuclear Energy's Resurgence
The Russia-Ukraine crisis has also accelerated the European Green Deal, an ambitious plan to transition towards greener energy. Many analysts argue that Russia's weaponization of natural gas, on which Europe was dependent for over 30 percent of its supply, highlighted the urgency of quickly transitioning to renewable energy to enhance energy security.
This has spurred not just the Green Deal but also European green industrial policy, akin to the U.S. Inflation Reduction Act, leading to "industrial competition around clean energy technologies".
Europe is investing approximately $250 billion towards the energy transition, fostering domestic industries to develop clean energy technologies. However, approaches vary across Europe, as demonstrated by the EU taxonomy, which, while focusing on climate adaptation and mitigation, includes both nuclear and natural gas alongside other renewables, reflecting contention between countries like France and Germany. Overall, the crisis has "quickened the energy transition" in Europe, with rapid deployment of solar and wind energy and increased attention on hydrogen.
Nuclear energy is gaining renewed interest in the context of decarbonising energy systems, given its zero-emitting nature. Countries like China and Saudi Arabia are seeing significant new nuclear builds.
France, which had planned to reduce its nuclear capacity by 50 percent, has now pivoted to build more nuclear, recognising its importance for its electricity system. Sweden also plans to significantly increase its nuclear capacity to meet net-zero targets.
Even Japan, deeply impacted by the Fukushima disaster, is now seeing a public shift towards restarting nuclear power plants due to concerns about energy insecurity and higher prices, viewing nuclear as a domestic energy source. Kissane stated that "I have not seen a net-zero pathway that does not include nuclear," highlighting its crucial role. However, challenges remain, including the high cost and significant overruns of building nuclear plants, as well as a persistent "PR problem" due to public safety concerns.
Major Challenges for the Geopolitics of Oil
A Five to Ten-Year Horizon
Looking ahead over the next five to ten years, the major challenges for the geopolitics of oil are significant and interconnected. Kissane outlined several key concerns:
Tightening Supply Amid Increasing Demand
Despite climate goals, global oil demand is expanding, particularly from Asia and Africa, while supply can be volatile due to geopolitical factors and OPEC+ decisions. This imbalance threatens to cause significant impacts on economies.
Impacts on Fragile Economies
Higher oil prices and energy inflation resulting from supply constraints will disproportionately affect "economies that are already very fragile, economically fragile, politically fragile". Ensuring adequate and affordable energy access for industries and consumers in these regions is paramount for stability.
Political Tensions and Lack of Investment
Beyond the Russia-Ukraine conflict, tensions between major global players like Saudi Arabia and the United States, as well as the United States and China, influence oil policy and markets. The lack of investment in crucial energy infrastructure, especially in countries like Russia due to sanctions, or in developing nations due to Western funding policies, could lead to future supply shortfalls and exacerbate energy insecurity.
Kissane cautioned against taking "more out of the system before we have adequately set up the system to be resilient, and to be able to sort of meet the energy security demands that are not—are not—they’re not decreasing. I think they are increasing and becoming even more complex". The future of global energy and international relations remains an area of profound uncertainty and constant observation.
Conclusion
The evolution of NATO and the shifting geopolitics of oil represent two critical axes of global stability and change. From its origins as a collective defence mechanism against Soviet aggression, NATO has continuously adapted, now focusing on deterring an emboldened Russia while navigating internal divisions and expanding its membership. Concurrently, Russia's war in Ukraine has profoundly remapped the global oil landscape, highlighting the delicate balance between energy security, economic stability, and the urgent imperative of the energy transition.
The world grapples with expanding oil demand, influenced by major economic powers like China and India, while simultaneously striving for decarbonisation and greater energy independence through initiatives like the European Green Deal and a renewed interest in nuclear power. Developing economies face unique challenges in securing energy access and attracting investment in a transitioning global energy system. The interconnectedness of these challenges underscores that global security and energy security are inextricably linked. The years ahead will demand astute international relations, sophisticated military strategy, and innovative energy policies to navigate the complex pathways towards a more secure and sustainable future.
Original source: What is NATO?
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