Introduction
Industrial civilization runs on energy. Without it, there are no factories, no transportation, no internet, no armies, and no cities. Whoever controls energy ultimately controls the world’s ability to function. That is why, throughout the 20th century and into our own time, energy has been — and remains — one of the most powerful levers of domination that exists.
When Pedro Baños systematized his 7 levers of domination, the economic lever held a central place. And within it, no resource has shaped global geopolitics as much as oil, followed by natural gas and, increasingly, the critical minerals required for the energy transition. Controlling these resources is not just a matter of markets: it is a matter of power, sovereignty, and in many cases, life or death for entire nations.
In this article, we explore how the geopolitics of energy has functioned as a lever of control throughout history, from the birth of the petrodollar to the oil wars, from gas as a political weapon to the new race for the minerals of the future.
The Blood of Empire: Oil and the 20th Century
At the start of the 20th century, the British navy burned coal. But in 1911, a young Winston Churchill — then First Lord of the Admiralty — made a decision that would change the course of history: convert the British fleet from coal to oil. The decision was not technical but strategic. Oil provided greater speed and range, but Britain had no oil of its own. The dependence on Persia (present-day Iran) was born there.
That moment was the seed of everything that followed. Oil ceased to be a simple fuel and became the axis of global geopolitics. As historian Daniel Yergin wrote in his classic work The Prize:
“Oil is 80% of 20th-century geopolitics. Everything else is the rest.”
Ever since, accessing, controlling, and securing oil routes has been an obsession for great powers. The creation of OPEC in 1960 by oil-producing countries was the first organized attempt to reclaim sovereignty over a resource that Western companies — the “Seven Sisters” — controlled almost completely.
The Seven Sisters and Corporate Control
Before producer states took control, oil was in the hands of a cartel of seven Western companies: Standard Oil of New Jersey (Exxon), Royal Dutch Shell, Anglo-Persian Oil Company (BP), Standard Oil of New York (Mobil), Standard Oil of California (Chevron), Gulf Oil, and Texaco. These companies controlled not only extraction but also refining, transportation, and distribution. They decided what was produced, at what price, and where it went.
That model of corporate control — with companies acting as extensions of their home countries’ interests — marked much of the 20th century. The nationalization of Iranian oil by Mossadegh in 1953, overthrown by a CIA- and MI6-orchestrated coup, was the first major clash between resource sovereignty and Western power.
The 1973 Embargo: When Oil Became a Weapon
The moment when energy openly revealed itself as a geopolitical weapon was the 1973 crisis. During the Yom Kippur War, Arab members of OPEC declared an oil embargo against the United States and countries supporting Israel. The price of crude quadrupled in a matter of months. Gas station lines in the West became the image of a new vulnerability.
The 1973 embargo demonstrated something that until then had only been intuited: oil-producing countries could use oil as a political weapon. The global economy, dependent on crude, became hostage to decisions made in the Middle East. That oil shock triggered a worldwide economic crisis, skyrocketed inflation, and reshaped the balance of power.
It was also the moment when Henry Kissinger, Nixon’s Secretary of State, set in motion one of the most brilliant geopolitical moves of the 20th century: the creation of the petrodollar system.
The Petrodollar: The Pact That Sustains the Empire
In 1971, Richard Nixon broke the dollar’s convertibility into gold — the so-called Nixon Shock — leaving the US currency without physical backing. The world needed a new anchor for the international monetary system. Kissinger found the solution in oil.
The secret agreement with Saudi Arabia was simple in its formulation and colossal in its consequences: the United States would guarantee the military protection of the Saudi monarchy, and in exchange, Saudi Arabia would sell all its oil in dollars and invest its surpluses in US Treasury bonds. The rest of OPEC followed suit.
The result was the petrodollar: a financial architecture in which every country in the world needs dollars to buy oil, creating artificial and permanent demand for the US currency. As we explored in our article on David Graeber and debt, state violence and financial control go hand in hand. The petrodollar is perhaps the most perfect example of this symbiosis: the currency of one nation becomes the world’s currency because the most vital resource is priced exclusively in it.
Any attempt to challenge the petrodollar — as Saddam Hussein did by selling oil in euros in 2000, or Muammar Gaddafi by proposing an African gold dinar — has been met with military intervention. The connection between energy control and financial control is inseparable.
The Oil Wars
The history of Western military interventions in the Middle East and North Africa cannot be understood without oil. Although the official motives are always the defense of democracy, human rights, or the fight against terrorism, the reality is that control of energy resources is always present.
Iraq 2003: The Oil War
The 2003 invasion of Iraq, justified by non-existent weapons of mass destruction, had among its most tangible consequences the control of the world’s second-largest oil reserves. US companies like ExxonMobil and Chevron obtained multi-billion dollar contracts after the invasion. Paul Bremer, the civil administrator of the occupation, signed orders opening Iraq to foreign oil investment — something Saddam Hussein had never allowed.
Libya: Oil as Spoils
In 2011, NATO’s intervention in Libya overthrew Gaddafi. After the civil war, the country fragmented and its oil production collapsed, but Western companies — especially Italian, French, and British ones — gained access to fields that had previously been under state control. Libya, which holds Africa’s largest oil reserves, went from being a sovereign country to a battlefield between factions, each backed by external powers interested in its crude.
Venezuela: Pressure on the World’s Largest Reserves
Venezuela holds the largest proven oil reserves on the planet. Its political conflict with the United States has had, at its center, control of PDVSA and oil production. Sanctions, asset freezes, and the recognition of parallel governments have been the tools used to attempt to change control of those resources. As the Atlantic Council notes, Venezuela represents a case of “resource control” as a central element of US energy geopolitics.
Natural Gas and the New European Geopolitics
If the 20th century was the century of oil, the 21st century is seeing natural gas become a first-order geopolitical weapon. And no example is clearer than Russia and Europe.
For decades, Europe built its energy security on Russian gas. Pipelines — Nord Stream 1 and 2 to Germany, TurkStream to southern Europe, the corridor through Ukraine — wove a mutual dependence that, in theory, was supposed to guarantee peace. In practice, it made Europe an energy hostage of Russia.
When Russia invaded Ukraine in 2022, gas became a double-edged weapon. Russia progressively reduced supply through Nord Stream 1, and in September 2022 the Nord Stream pipelines were sabotaged — an act whose authorship remains controversial. Europe faced an unprecedented energy crisis, with soaring prices, inflation, and the real risk of industrial blackouts.
Europe’s response was to accelerate diversification: building LNG (liquefied natural gas) terminals, reactivating coal plants, and seeking new suppliers — the United States, Qatar, Norway. But the lesson was seared in: energy dependence is geopolitical vulnerability.
The European case is a perfect example of what Pedro Baños calls the economic and technological lever of domination: whoever controls the energy flows of a country or region can condition its political decisions without firing a single shot.
The Energy Transition: The New Board of Critical Minerals
If oil control defined the 20th century, the energy transition is redefining the board of the 21st century. Decarbonizing the economy does not mean the end of resource geopolitics; it means its transformation. Fossil fuels will be progressively replaced by renewable energy, but these require massive amounts of specific minerals.
Lithium — essential for electric vehicle batteries and energy storage — has become the “new oil.” The lithium triangle (Argentina, Bolivia, Chile) concentrates more than 60% of the world’s reserves. Cobalt, indispensable for many batteries, is mostly mined in the Democratic Republic of Congo, often under extreme exploitation conditions. Rare earth elements, needed for wind turbine magnets and electric motors, are dominated by China, which controls nearly 90% of global refining.
Here a new dependency pattern emerges. Just as oil-producing countries were a periphery of Western power during the 20th century, the countries rich in critical minerals — many in the Global South — risk repeating the same role in the new green economy.
China has understood this perfectly. Through its Belt and Road Initiative, it has secured priority access to lithium mines in Australia, Chile, and Argentina, cobalt refineries in the Congo, and rare earth production globally. Beijing now controls the processing of over 70% of the world’s lithium and 100% of the natural graphite used in batteries.
The New Energy Periphery
The pattern that Eduardo Galeano and Aníbal Quijano described — the international division of labor between extractive countries and industrialized countries — is being reproduced in the energy transition. Global South countries extract the raw materials; Global North countries process them, manufacture the technologies, and set the standards.
The difference is that there are now more players at the table. China competes directly with the United States and Europe for control of supply chains. The US Inflation Reduction Act (IRA) and the European Union’s Carbon Border Adjustment Mechanism (CBAM) are instruments of this new trade and technology war.
Connection to the Geopolitics of Control Series
This article is the first in a new batch within our Geopolitics of Control series, and connects directly with several themes we have explored before.
Recall Pedro Baños’s 7 levers: the economic lever is inseparable from energy control. Oil, gas, and critical minerals are the blood circulating through the world-system. Whoever controls energy resources can condition economies, influence governments, finance wars, or simply strangle an adversary without mobilizing a single soldier.
Baños’s technological lever manifests in the energy transition: whoever dominates the technologies of batteries, solar panels, or critical mineral refining — as China does today — gains an immense strategic advantage.
Furthermore, the petrodollar system we have described is a perfect example of David Graeber’s central thesis: markets and money are sustained by state violence and political control. The dollar is not the world’s currency because it is the most efficient, but because it was imposed through a geopolitical pact backed by the largest military machine in history.
Earlier articles in the series — Foucault and biopolitics, Lazzarato and the indebted man, Chomsky and propaganda — have shown us how power filters through debt, information, and the management of life. Energy is perhaps the most tangible of all these levers: without it, the system simply stops.
FAQ
What is the petrodollar and why is it important?
The petrodollar is the system by which all international oil trade is conducted in US dollars. It was born from a secret agreement between the United States and Saudi Arabia in 1973-74, following the Nixon Shock. Its importance is colossal: it creates artificial and permanent demand for dollars worldwide, allowing the United States to easily finance its deficit and maintain its global financial hegemony.
How is energy used as a geopolitical weapon?
Energy is used as a geopolitical weapon in multiple ways: embargoes (like OPEC’s in 1973), supply cuts (like Russia’s gas reduction to Europe in 2022), control of energy routes (Strait of Hormuz, Malacca), sanctions on producers (Venezuela, Iran), wars to control oil fields (Iraq, Libya), and monopolization of critical mineral supply chains.
Which countries control critical minerals for the energy transition?
China dominates global refining: nearly 90% of rare earths, over 70% of processed lithium, and most graphite. Australia is the largest lithium producer. Chile and Argentina hold the largest reserves. The Democratic Republic of Congo produces most of the world’s cobalt, though China controls much of the refining and trading.
Why was the 2003 Iraq war linked to oil?
Although the invasion was justified by weapons of mass destruction and the fight against terrorism, Iraq holds the world’s second-largest oil reserves. After the invasion, Iraq’s oil sector was opened to foreign investment — something Saddam Hussein’s regime had nationalized — and Western oil majors obtained multi-billion dollar contracts. Additionally, Saddam had begun selling oil in euros in 2000, challenging the petrodollar.
Will the energy transition reduce geopolitical conflicts?
Not necessarily. The energy transition will change the object of competition — from fossil fuels to critical minerals and clean technologies — but it will not eliminate the struggle for resources. In fact, it could generate new dependency dynamics and conflicts, especially if mineral-rich countries repeat the historical pattern of remaining extractive peripheries without their own industrial development.
Conclusion
The geopolitics of energy is, in essence, the story of how energy resources have shaped global power. From coal to oil, from oil to gas, from gas to critical minerals, each energy transition has reconfigured the map of power without eliminating the underlying logic: whoever controls the blood of the system controls the system.
The petrodollar taught us that energy control and financial control are two sides of the same coin. The oil wars showed us that powers are willing to invade countries to secure resource flows. Europe’s gas crisis reminded us that energy dependence is the fastest way to lose sovereignty. And the transition to clean energy confronts us with a new board on which China, the United States, and Europe compete to dominate the supply chains of the future.
Understanding energy control is understanding one of the deepest levers of global power. And perhaps also the first step toward imagining how to deactivate it.
This article is part of the Geopolitics of Control series, in which we explore the different forms of domination that structure the world. You can read the introduction here or explore previous articles on Bertrand de Jouvenel, Pedro Baños, or the IMF and World Bank. If you value this work, consider supporting the project.
📚 Related Books
- The Prize: The Epic Quest for Oil, Money & Power — Daniel Yergin
- The New Map: Energy, Climate, and the Clash of Nations — Daniel Yergin
- Crude World: The Violent Twilight of Oil — Peter Maass
- Private Empire: ExxonMobil and American Power — Steve Coll
- The Battle for Energy — various authors
- El dominio mundial — Pedro Baños (Spanish)