Oil is geopolitics in liquid form
5 min
When people think of oil, they tend to think of what goes into their car. But oil is far more than fuel. It is a geopolitical tool, a source of power, a lever in international relations. That is precisely why, even in times of transition towards greener energy, oil remains one of the most strategic commodities in the world.
Oil is unique because it is essential, globally tradable and unevenly distributed. While not every country has oil, almost every country needs it. This creates dependency, and dependency is always geopolitical.
A dominant energy source
Oil remains dominant in global energy consumption, accounting for around 30% of total energy use. While it is rarely used to generate electricity, which accounts for around 20 to 25% of total energy consumption, it is primarily used in transport, such as cars, aviation and shipping, and as an industrial input. Other major energy sources include coal (24.6%) and gas (22.1%). Renewable energy — including solar, wind and hydro — currently represents around 14%. Renewables are the future, but oil remains the reality today.
50 years of reserves
Around 50% of the world’s proven oil reserves are located in the Middle East. Global reserves are estimated at around 1.6 trillion barrels. At current consumption levels of around 100 million barrels per day, this equates to a supply of roughly 45 to 50 years in theory. However, new discoveries may still be made and technology continues to evolve, as demonstrated by US shale oil. Europe currently imports 94.8% of its oil. In the 1980s and 1990s, the continent produced 20–30% of its own oil, mainly through Norway and the United Kingdom. This safety net has largely disappeared.
The United States is a special case. Not only is it the world’s largest producer, it also provided military protection to oil-producing regions in the Middle East for many years. Thanks to the shale revolution, US oil production increased from 5.8 million barrels per day in 2000 to 13.2 million barrels per day in 2024. This energy independence has significantly increased its geopolitical manoeuvreability.
High stakes for OPEC
OPEC, the group of oil-producing countries that exhibits cartel-like behaviour, is a key player. Together with OPEC+, which includes Russia among others, it can influence global markets through production agreements. OPEC is not all-powerful — ultimately, demand determines prices — but it is far from powerless. The stakes are enormous: according to the International Energy Agency, OPEC countries earned around 550 billion US dollars in oil export revenues in 2024 — roughly equivalent to Belgium’s entire GDP. For most Gulf countries, oil and gas revenues account for around four-fifths of government income.
Conflicts in oil-producing regions therefore quickly become global concerns. This is not because every conflict is 'about oil', but because oil raises the stakes. The Strait of Hormuz, a narrow waterway between Iran and Oman, is the clearest example of this: around 20% of the world's oil trade passes through it every day. Block that route, and the entire global economy will feel the impact.
The lesson is simple yet often overlooked: oil determines the cost of transport, how quickly inflation rises, which countries become wealthy or powerful, and why some conflicts become so volatile. Oil is not just a commodity. It is geopolitics in liquid form.