The View From Dr. Sarah Kapnick and Derek Chollet
Energy prices are volatile as the Iran conflict has disrupted flows through the Strait of Hormuz. Shipping insurance premiums are surging and tanker routes are shifting. Major countries such as India are having to ration oil and gas, which, until recently, were projected to be in surplus. Even before any major infrastructure has been directly struck, geopolitical risk has grown.
Yet the significance of this moment goes beyond another oil-price spike. It underscores how the geopolitics of energy have not simply changed.
In fact, the world has entered a new energy security age.
In the past, energy security was largely defined by access to oil and gas. Today, the competition revolves around a much broader system: resources, infrastructure, technology, and finance. The Iran crisis illustrates all four dynamics at once.
Hydrocarbons, to be sure, remain powerful geopolitical levers. The Middle East still sits at the center of global oil supply, and key shipping chokepoints remain structural vulnerabilities. Roughly 20% of global oil flows through Hormuz, meaning even the threat of disruption is enough to move markets and reshape diplomatic calculations. So, even after the military campaign ends, maintaining secure access through the strait for hydrocarbons will be an enduring concern.
Critical minerals, electricity grids, nuclear technology, and clean-energy supply chains are, however, increasingly shaping geopolitical influence. In the emerging energy system, power flows not only through pipelines and tankers but also through transmission cables, semiconductor supply chains, and the capital markets that finance infrastructure.
This broader competition is already reshaping how countries respond to crises.
Russia’s invasion of Ukraine triggered an extraordinary energy pivot across Europe. Governments rushed to build LNG terminals, diversify gas supplies, and accelerate cross-border electricity interconnections. Some experts are now wondering whether chronic instability will force the Europeans back to Russia or deepen reliance on US LNG. Across Asia, countries are investing heavily in nuclear power, hydrogen infrastructure, and grid expansion to secure long-term resilience. In the US and among its allies, industrial policy is increasingly focused on securing supply chains for critical minerals that underpin batteries, semiconductors, and advanced energy technologies.
Energy systems themselves are becoming strategic infrastructure.
This shift is occurring just as global energy demand enters a new phase of structural growth: Artificial intelligence, electrification, and industrial reshoring are driving enormous increases in electricity consumption.
The result is a paradox.
On one hand, the global energy mix is diversifying: Solar, wind, nuclear, and geothermal power are expanding rapidly, reducing dependence on any single fuel or region. On the other, the infrastructure needed to deliver that energy — transmission grids, mineral supply chains, data-center power systems, and global financing networks — is creating new forms of geopolitical interdependence.
Resilience and vulnerability are growing simultaneously.
For investors and policymakers, this reality carries two lessons.
The first is that energy security now demands tapping all sources of diversified energy — an “all of the above” approach. In the near term, stabilizing global energy markets still requires sufficient investment in oil and gas supply. At the same time, scaling renewables, nuclear, and emerging technologies will be essential in order to diversify the system and reduce exposure to geopolitical chokepoints.
The second is that alliances are increasingly being built through energy infrastructure. Cross-border electricity grids, LNG supply agreements, mineral partnerships, and technology standards are becoming instruments of diplomacy as much as economic policy.
In the decades ahead, the countries that succeed will be those that recognize this shift early and invest accordingly.
Energy has always shaped geopolitics. But the crisis surrounding Iran shows how the map is being redrawn. The contest is no longer just about who controls the oil fields. It is about who controls the systems that power the 21st-century economy.
Dr. Sarah Kapnick is the Global Head of Climate Advisory at JP Morgan and previously Chief Scientist of National Oceanic and Atmospheric Administration. Derek Chollet is the Head of JPMorganChase Center for Geopolitics and previously Chief of Staff to the US Secretary of Defense.
Notable
- A recent piece by the Center for Strategic and International Studies (CSIS), a Washington think tank, argues Gulf states’ extreme dependence on coastal desalination makes their water supplies a prime wartime vulnerability, with risks that could threaten millions and destabilize the region.
- The Council on Strategic Risks warns that the Iran war’s closure of the Strait of Hormuz has triggered a global fertilizer and food supply crisis, highlighting how intertwined conflict, climate instability, and food insecurity have become.