The geopolitics of energy markets – with Helen Thompson

In the first of a two part special, Luke Bartholomew and Paul Diggle are joined by Professor Helen Thompson, Professor of Political Economy at Cambridge University, and author of the recent book Disorder: Hard Times in the 21st Century. In this episode they discuss the geopolitics of energy supply, and how this helps to explain aspects of Russia’s war in Ukraine, the green transition, and other features of the global economy.

 The key takeaways are: 

 Energy markets provide a vital frame to understand 20th and 21st century geopolitics. US energy independence has complicated the relationship between the US, Russia, and the Middle East; while European energy dependence has been an ongoing source of political and economic volatility. 

The German energy strategy of binding Russia’s economic interests with Europe’s through mutual dependence on energy ties failed in part because Russia judged that non-European sources of demand reduced its dependence on European demand. The transition to renewable energy is likely to bring further geopolitical tensions in part due to China’s dominance in the supply of key resources involved in green technologies. The political response to today’s high energy prices has so far revolved around subsidising demand rather than cutting demand through moral suasion and a ‘politics of sacrifice’. That may change this winter if Russia cuts gas supplies to Europe. Conditions of war may be more conducive to appeals to sacrifice, but politicians have so far struggled to mobile this rhetoric around using less energy as a necessary component of net zero.