1.0 Introduction:
The World Isn't as Green as You Think
The dominant public narrative suggests a world in a rapid, decisive transition to green energy. Headlines celebrate renewable energy milestones and the rise of electric vehicles, painting a picture of a global economy steadily weaning itself off fossil fuels. This story is optimistic, and in many ways, it is happening. But it is not the whole story.
Beneath this narrative lies a much more complex and surprising reality, one governed by the hard-edged logic of geopolitics, national interests, and inconvenient truths about resource consumption. The global energy map is being redrawn not just by climate agreements, but by tense alliances, strategic rerouting of resources, and the fundamental needs of growing economies.
This article explores seven of the most impactful and counter-intuitive takeaways from recent analyses of global oil markets and regional power dynamics. These realities challenge common assumptions and are critical to understanding the forces that will shape the 21st century.
2.0 Takeaway 1:
Global Oil Demand Is Actually Increasing, Not Shrinking
The Myth of Peak Oil: Global Demand is Growing
The world consumes over 100 million barrels of oil every single day, and this demand is projected to expand, not contract, in the near future. This staggering statistic directly challenges the idea of a swift global pivot away from oil. The growth is not being driven by the West, but by rising economies, particularly in Asia, as they expand and lift their populations into the middle class. The deep integration of oil into the global economy is undeniable; even during the peak of global COVID-19 lockdowns, when transportation and industry ground to a halt, oil demand only dropped by less than 10 million barrels a day.
This reality complicates global efforts to meet climate goals like the Paris Agreement. As Dr. Carolyn Kissane, a clinical professor at New York University's Center for Global Affairs, notes:
"And what we’re not seeing—which, maybe some people may have thought that we would see at this point—is we’re not seeing a reduction in demand, but we’re seeing an expansion in demand. And much of that global demand is coming out of Asia."
Adding another layer of complexity, the narrative is not as simple as "green versus fossil." Even within the oil industry, producers are adapting to climate pressures by competing to market "low-emission oil," focusing on reducing the carbon intensity of their extraction processes. This strategic shift further complicates the global energy picture, creating a market where the source and production method of fossil fuels are becoming as important as the fuel itself.
3.0 Takeaway 2:
Forget Exxon. State-Owned Companies Control Most of the World's Oil.
The Real Oil Barons: State-Owned Companies Run the Show
While international oil companies (IOCs) like ExxonMobil and Chevron are household names in the West, they are not the dominant players. Over 75% of the world's oil is controlled by national oil companies (NOCs) owned and operated by governments. The true power brokers in the global oil market are state-owned giants like Saudi Aramco.
This fact has critical implications. Major decisions about oil production levels—the very decisions that influence the price of gas at the pump and the stability of the global economy—are often driven by national budgets, government revenue needs, and geopolitical strategy, not just market forces or shareholder value. Unlike ExxonMobil, which ultimately answers to its shareholders, Saudi Aramco answers directly to the state's budget and the foreign policy objectives of the Crown Prince. As Dr. Kissane emphasizes:
"...over 75 percent of the world’s oil is controlled, managed by state-owned oil companies. ... it’s really important to sort of recognize the position that state-owned companies have."
4.0 Takeaway 3:
Sanctions Have Remapped, Not Stopped, Russia's Oil Exports
The Sanctions Paradox: Russia's Oil Finds New Roads
Despite extensive Western sanctions following its 2022 reinvasion of Ukraine, Russia remains one of the top three oil producers in the world. The sanctions regime, designed to cripple Russia's ability to fund its war, has triggered a massive remapping of energy flows rather than stopping them.
Russia has successfully rerouted its oil from West to East, finding new primary buyers eager to purchase its crude at a discount. These nations include China, India, Turkey, and Singapore. The strategic logic behind these purchases is clear: India has been building out its domestic refining capacity, using the cheap crude for its own needs and for re-export, while China has used the discounted oil to fill its strategic reserves.
Furthermore, Russia continues to find workarounds, including the use of a "shadow tanker" fleet to move its oil covertly and bypass sanctions. The impact is profound: the sanctions have reshaped the global energy map and forged new economic relationships, but they have failed to neutralize Russia's ability to produce and sell its most valuable commodity.
5.0 Takeaway 4:
The Decades-Old U.S.-Saudi "Oil for Security" Alliance Is Fraying
A Fraying Pact: The U.S.-Saudi Alliance Is Undergoing a Tectonic Shift
The foundational pact between the United States and Saudi Arabia—a U.S. guarantee of security in exchange for stable oil supplies—has been a pillar of global energy security since the end of World War II. Today, that relationship is facing a fundamental strategic realignment.
A key driver of this shift is the U.S. shale revolution, which has increased America's own oil production and reduced its direct dependence on Middle Eastern imports.
This growing distance is evident in a series of strategic Saudi moves. Riyadh has pursued a "non-alignment policy" regarding Russia's war in Ukraine and has led OPEC+ (which includes Russia, Kazakhstan, and Mexico) in production cuts against the explicit wishes of the U.S. administration.
These actions are directly enabled by the remade energy map described in the previous section, allowing Saudi Arabia to hedge its bets in a new multi-polar world. Perhaps most strikingly, it recently allowed China to broker a diplomatic rapprochement with its regional arch-rival, Iran. We are not witnessing a temporary spat, but the emergence of a "very new relationship" that signals a significant reordering of global power dynamics.
6.0 Takeaway 5:
The Energy Transition Creates a Massive Ethical Dilemma for the Developing World
The Transition's Dilemma: A Question of Hypocrisy for the Developing World
Nearly all future growth in energy demand will come from developing countries in Asia and Africa as their economies grow and their populations seek higher standards of living. Historically, the cheapest and most reliable path to industrialization and widespread energy access has been through fossil fuels.
This creates a sharp conflict. Many Western governments and financial institutions, citing their climate commitments, are now refusing to fund new fossil fuel projects abroad.
This policy raises profound questions of equity and "hypocrisy," as Western nations built their own wealth on the back of fossil fuels but are now actively denying that same development path to others. Dr. Kissane articulates the dilemma:
"And also, you know, is it hypocrisy, right, for Western banks that have, you know, kind of funded the oil and gas industry... in the United States and many different parts of the world, and that are now sort of not allowing those funds to flow to Africa."
7.0 Takeaway 6:
ASEAN Is an Economic Giant Paralyzed by Its Own Rules
An Economic Giant in Chains: ASEAN's Paralysis by Consensus
The Association of Southeast Asian Nations (ASEAN) is an economic powerhouse that is frequently rendered impotent by its own foundational principles. First, consider the scale: ASEAN is a bloc of ten nations with a combined population of 678 million and a GDP of $3.9 trillion. It was central to creating the Regional Comprehensive Economic Partnership (RCEP), the world's largest free trade agreement.
But the organization is guided by core principles of "noninterference in internal affairs" and decision-making by "consensus." While intended to respect national sovereignty, these rules have become a major strategic drawback.
They have effectively paralyzed the bloc, preventing it from forming a cohesive response to critical security challenges, including the violent military coup in member-state Myanmar and China's aggressive territorial claims in the South China Sea. As CFR’s Joshua Kurlantzick states:
“These norms of consensus and noninterference have increasingly become outdated, and they have hindered ASEAN’s influence on issues such as dealing with China and crises in particular ASEAN states.”
8.0 Takeaway 7:
The Country With the World's Largest Oil Reserves Can't Get It Out of the Ground
The Paradox of Plenty: Venezuela's Trapped Oil Wealth
Venezuela has the largest proven oil reserves in the world—even more than Saudi Arabia—but its production has been in "freefall" for years. This is one of the greatest paradoxes in the energy world. A nation sitting on unparalleled hydrocarbon wealth is "far from being at capacity."
The reasons for this collapse are a case study in above-ground risk—a term for political instability, corruption, and poor policy that prevent resources from being extracted, as opposed to geological challenges.
Chronic political instability, a near-total lack of international investment due to sanctions, and crumbling infrastructure that "would need a significant amount of reinvestment to get it up to a place that it could sort of meet its potential" have left its oil trapped.
Adding to its challenges, Venezuelan crude is a very heavy oil with high carbon emissions associated with its production, making it even harder to attract investment in an increasingly climate-conscious world.
9.0 Conclusion:
Navigating a World of Contradictions
The global systems of energy and power are defined by complexity that defies simple headlines. A clean energy transition is underway, but so is soaring demand for oil. Alliances that defined the 20th century are undergoing a fundamental realignment, while institutional rules prevent regional blocs from acting decisively.
Understanding these realities is not a cause for cynicism, but a prerequisite for clear-eyed analysis. The greatest risk ahead is not the slow pace of the green transition, but the increasing fragility of the current system.
As geopolitical tensions, underinvestment, and a tightening supply threaten the world’s energy flows, we face a future where we may dismantle the old energy infrastructure before the new one is resilient enough to take its place—creating a crisis of security and affordability for all.
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