Table of Contents
Resources, Energy and Geoeconomics
Introduction
Natural resources and economic capabilities are important sources of international power. States depend on energy, minerals, food, water, technology and industrial inputs to sustain their economies and national security.
Geoeconomics examines how economic instruments are used to pursue geopolitical and strategic objectives. It connects economic power with international competition.
Energy has traditionally occupied a central place in geoeconomics because oil and natural gas are essential to transportation, industry, electricity generation and government revenues in many countries. The energy transition is now adding new strategic resources such as lithium, cobalt, nickel, copper and rare earth elements.
The relationship between resources and power is not automatic. Resource-rich states can gain economic and political advantages, but dependence on a narrow resource base can also create vulnerability.
Natural Resources
Natural resources are materials and environmental assets that can be used to support human activity and economic production.
They include:
- Oil
- Natural gas
- Coal
- Minerals
- Water
- Forests
- Agricultural land
- Fisheries
Strategic Resources
Strategic resources are resources considered particularly important to national security, economic stability or technological development.
Their strategic importance may result from:
- Scarcity
- Geographic concentration
- Limited substitutes
- Industrial importance
- Military applications
- Supply-chain vulnerability
Resource Geography
Resource geography examines where natural resources are located and how their distribution affects economic and political relationships.
Resource distribution is highly uneven across the world.
Resource Security
Resource security refers to reliable access to resources at acceptable economic and strategic cost.
It can concern:
- Energy
- Food
- Water
- Minerals
- Industrial inputs
Energy Security
Energy security refers to reliable and affordable access to energy.
It commonly involves four dimensions:
- Availability
- Accessibility
- Affordability
- Sustainability
Energy security is therefore both an economic and strategic issue.
Fossil Fuels
Fossil fuels include:
- Oil
- Natural gas
- Coal
They have historically been central to global economic development and international political economy.
Crude Oil
Crude oil is a naturally occurring liquid hydrocarbon that can be refined into fuels and other products.
Oil has major geopolitical importance because of its role in transportation, industry and global trade.
Natural Gas
Natural gas is a gaseous fossil fuel used for electricity generation, heating, industry and other purposes.
Its transport can occur through:
- Pipelines
- Liquefied natural gas shipping
Liquefied Natural Gas
Liquefied natural gas, or LNG, is natural gas cooled to a liquid state to facilitate transportation by specialized ships.
LNG can increase flexibility in international gas markets because it does not require a fixed pipeline connection between producer and consumer.
Energy Interdependence
Energy interdependence occurs when states depend on one another for energy production, transportation, investment or consumption.
This can create:
- Mutual economic benefits
- Strategic vulnerabilities
- Political leverage
- Incentives for cooperation
Energy Dependence
Energy dependence refers to reliance on external sources for a significant share of energy requirements.
High dependence can expose a state to:
- Price fluctuations
- Supply disruption
- Political pressure
- Transport risks
Energy Leverage
Energy leverage occurs when control over energy production, transportation or supply provides political or economic influence over other actors.
Energy leverage may be exercised through:
- Supply agreements
- Pricing
- Infrastructure
- Investment
- Export restrictions
Resource Curse
The resource curse refers to the paradox in which countries with abundant natural resources may experience problems such as economic volatility, weak institutions, corruption or conflict.
Resource abundance does not automatically produce the resource curse. Outcomes depend on institutions, economic diversification, governance and political conditions.
Dutch Disease
Dutch disease describes a situation in which a large resource boom contributes to currency appreciation and reduces the competitiveness of other tradable sectors.
The concept is associated particularly with natural-resource economies.
Rentier State
A rentier state is a state that derives a substantial share of its income from external rents rather than domestic productive taxation.
Oil-exporting states are often discussed in relation to rentier-state theory.
Resource Nationalism
Resource nationalism refers to policies through which governments seek greater control over natural resources and the economic benefits generated by them.
It may involve:
- State ownership
- Higher royalties
- Export restrictions
- Local-content requirements
- Renegotiation of contracts
Energy Diplomacy
Energy diplomacy refers to diplomatic activity related to energy production, trade, transportation, investment and security.
It can involve:
- Pipeline agreements
- LNG contracts
- Energy partnerships
- Investment arrangements
- Strategic reserves
- International energy organizations
Pipeline Geopolitics
Pipeline geopolitics concerns the strategic importance of oil and gas transportation routes.
Pipelines can create:
- Transit dependence
- Economic revenues
- Strategic partnerships
- Political leverage
- Vulnerabilities
Energy Transit State
An energy transit state is a country through which significant energy supplies pass between producers and consumers.
Transit states can gain:
- Transit fees
- Investment
- Strategic importance
- Political leverage
They may also face pressure from producers and consumers.
Strategic Reserves
Strategic reserves are stockpiles maintained to protect against supply disruptions.
The most prominent example is the strategic petroleum reserve maintained by some oil-consuming states.
Energy Diversification
Energy diversification involves reducing dependence on a single energy source, supplier or transportation route.
It may involve:
- Multiple suppliers
- Renewable energy
- Nuclear energy
- LNG
- Alternative pipelines
- Strategic reserves
Renewable Energy
Renewable energy comes from sources that are naturally replenished.
Major sources include:
- Solar
- Wind
- Hydropower
- Geothermal
- Biomass
The expansion of renewables is changing the geopolitics of energy.
Energy Transition
Energy transition refers to the shift from energy systems dominated by fossil fuels toward systems with greater use of low-carbon and renewable energy sources.
It affects:
- Oil-producing states
- Gas exporters
- Mineral producers
- Industrial policy
- Technology competition
- Global trade
Critical Minerals
Critical minerals are minerals considered particularly important for economic or technological systems and potentially vulnerable to supply disruption.
Examples can include:
- Lithium
- Cobalt
- Nickel
- Copper
- Graphite
- Rare earth elements
Definitions vary by country and institution.
Rare Earth Elements
Rare earth elements are a group of chemically similar elements used in various advanced technologies.
Applications can include:
- Electronics
- Magnets
- Renewable energy technologies
- Defence systems
- Advanced manufacturing
Their strategic importance is influenced by geographic concentration of mining and processing.
Mineral Supply Chains
Mineral supply chains involve the stages from extraction through processing, manufacturing and final use.
A state may possess mineral deposits but still depend on foreign countries for:
- Processing
- Refining
- Technology
- Manufacturing
Supply-Chain Security
Supply-chain security refers to efforts to ensure reliable access to critical goods and inputs.
It may involve:
- Diversification
- Stockpiling
- Domestic production
- Strategic partnerships
- Recycling
- Substitution
Geoeconomics
Geoeconomics is the use of economic instruments to pursue geopolitical objectives.
Instruments can include:
- Trade
- Investment
- Sanctions
- Export controls
- Development finance
- Infrastructure
- Energy policy
- Technology restrictions
Economic Statecraft
Economic statecraft refers to the use of economic means to pursue foreign-policy or strategic objectives.
It can include both incentives and coercive measures.
Economic Coercion
Economic coercion occurs when economic pressure is used to influence the behaviour of another state or actor.
Potential instruments include:
- Sanctions
- Tariffs
- Export restrictions
- Investment restrictions
- Financial measures
Economic Incentives
Economic statecraft can also use positive incentives.
Examples include:
- Development assistance
- Investment
- Trade preferences
- Loans
- Market access
- Infrastructure finance
Sanctions
Economic sanctions are restrictions imposed to influence the behaviour of a target state, organization or individual.
They may target:
- Trade
- Finance
- Energy
- Technology
- Individuals
- Institutions
Tariffs
A tariff is a tax imposed on imported goods.
Tariffs can serve:
- Revenue objectives
- Protectionist objectives
- Negotiating purposes
- Strategic objectives
Export Controls
Export controls restrict the transfer of specified goods, technologies or services to particular destinations or users.
They are increasingly important in strategic technology competition.
Investment Screening
Investment screening refers to government review of foreign investments for national-security or strategic concerns.
Governments may scrutinize investments involving:
- Critical infrastructure
- Technology
- Energy
- Defence
- Telecommunications
- Sensitive data
Development Finance and Geoeconomics
Development finance can have both economic and geopolitical significance.
Infrastructure financing may:
- Improve connectivity
- Open markets
- Strengthen partnerships
- Increase economic influence
Economic Connectivity
Economic connectivity refers to the degree to which economies are linked through:
- Trade
- Investment
- Infrastructure
- Finance
- Technology
- Supply chains
Connectivity can generate mutual benefits but can also create dependencies.
Weaponized Interdependence
Weaponized interdependence refers to situations in which states use advantageous positions within global networks to exert political influence.
Networks that may create strategic leverage include:
- Financial systems
- Technology platforms
- Payment networks
- Supply chains
- Digital infrastructure
Resource Competition
Resource competition occurs when states or other actors compete for access to scarce or strategically important resources.
Competition can involve:
- Minerals
- Energy
- Water
- Fisheries
- Agricultural land
Resource Security and Conflict
Resource scarcity can contribute to political tension, but scarcity alone does not automatically cause conflict.
Outcomes depend on:
- Institutions
- Distribution
- Governance
- Economic conditions
- Population pressures
- Cross-border arrangements
Key Distinctions
Energy Security vs Energy Independence
Energy security concerns reliable and affordable access to energy. Energy independence seeks to reduce or eliminate reliance on external suppliers.
Resource Wealth vs Resource Curse
Resource wealth refers to abundance of valuable resources. The resource curse describes potential negative economic and political outcomes associated with resource dependence.
Geoeconomics vs Economic Statecraft
Geoeconomics is the broader study of economic power in geopolitical competition. Economic statecraft refers specifically to the use of economic instruments to pursue strategic objectives.
Economic Coercion vs Economic Incentives
Economic coercion seeks behavioural change through pressure. Economic incentives seek behavioural change through benefits.
Critical Minerals vs Natural Resources
Natural resources are a broad category. Critical minerals are a narrower category of minerals considered particularly important and potentially vulnerable to supply disruption.
Key Terms at a Glance
| Term | Meaning |
|---|---|
| Natural Resources | Materials and assets obtained from nature |
| Strategic Resources | Resources with significant security or economic importance |
| Resource Security | Reliable access to important resources |
| Energy Security | Reliable, affordable and sustainable access to energy |
| Energy Dependence | Reliance on external energy sources |
| Energy Leverage | Strategic influence derived from energy capabilities |
| Resource Curse | Potential negative effects associated with resource abundance |
| Dutch Disease | Economic effects of a resource boom reducing other-sector competitiveness |
| Rentier State | State relying substantially on external rents |
| Resource Nationalism | Greater government control over natural resources |
| Energy Diplomacy | Diplomacy concerning energy |
| Energy Transition | Shift toward lower-carbon and renewable energy systems |
| Critical Minerals | Minerals important to strategic and economic systems |
| Geoeconomics | Use and study of economic power in geopolitical competition |
| Economic Statecraft | Use of economic instruments for strategic objectives |
| Economic Coercion | Use of economic pressure to influence behaviour |
| Investment Screening | Review of foreign investment for strategic concerns |
| Weaponized Interdependence | Use of advantageous positions in global networks for leverage |
Related Glossaries
- Geopolitics: Core Concepts
- Geostrategy and Strategic Geography
- Chokepoints, Corridors and Strategic Locations
- Critical Minerals and Strategic Resources
- International Political Economy: Core Concepts
- International Trade and Protectionism
- Global Finance and Monetary Relations
- Foreign Investment, Aid and Development Finance
- Economic Sanctions, Economic Statecraft and Trade Wars
- Global Supply Chains and Economic Interdependence
- Gulf Politics and Energy Security
- Energy Transition and Renewable Energy
- Environmental Security and Resource Conflicts
- Water Security and Transboundary Waters
- Global Development and Inequality
Conclusion
Resources, energy and economic networks are increasingly important dimensions of geopolitical power. Oil and gas remain strategically significant, while the energy transition is increasing the importance of critical minerals, advanced technologies and resilient supply chains. Geoeconomics provides a framework for understanding how trade, investment, finance, sanctions, infrastructure and technology can be used as instruments of international strategy. The resulting competition is increasingly intertwined with traditional military and diplomatic power.