By Sam Peters
The Geo-Energy Era, marked by high oil prices and geopolitical conflict over dwindling resources, will require a global effort at responsible energy harvesting. SLOCs, or “sea lines of communication,” such as the Strait of Hormuz and the Strait of Malacca, continue to be important geopolitical hotspots, causing exacerbated tensions between the U.S., Russia, and China. In the mean time, corporate energy giants, some of which need considerable reputation management in the aftermath of oil spills, will be bidding for the keys to three major geographic zones that will be important topics of conversation for energy investment:
Strait of Hormuz
Bridging the Persian Gulf to the Indian Ocean, the Strait of Hormuz is the only real physical connection between between this area and the rest of the world. It hosts vessels which transports 17 million barrels of oil every day. The Iranian government’s recent threats to block the Strait immediately resulted in higher oil prices, even though the threats weren’t backed up with any actual actions. Since as early as the 80s, when President Carter issued his Doctrine, Hormuz has been considered one of the most important energy chokeholds in the world, as a significant restriction placed on it could cause a prolonged global economic catastrophe.
The South China Sea
Important both as a fishing region and commercial shipping zone for many major European, Asian, and African nations, the South China Sea also figures as a major source of tension between the United States and China over the oil and gas deposits that have been discovered there. China essentially claims that its ownership over many of the islands in the body of water grant it first rights to the energy contained there, whereas American allies who comprise the ASEAN (Association of Southeast Asian Nations) claim to have just as legitimate a claim. While interested world leaders have been treading lightly over this issue, you can expect geopolitical infighting over energy reserves in the South China Sea to become major international talking points in the coming decades.
The Caspian Sea Basin
Surrounded by Russian, Iran, and the fragments of the USSR, the Caspian Sea Basin has been estimated to contain 48 million barrels of oil and 449 trillion feet of natural gas. Transportation of this energy will require a Herculean effort to build proper rail and pipeline infrastructure, which will itself require the various politically volatile nations of Azerbaijan, Kazakhstan, Turkmenistan, Armenia, Georgia, Kyrgyzstan, and Tajikistan all playing nice amidst ethnic squabbles and regional conflicts.
Geopolitical energy debates will become even more heated in the coming decades, as petroleum slides down from its high point in production and forces companies to consider adopting alternative energy sources and alternative methods of acquiring oil and gas. The geopolitical hotspots listed above should remain on your radar for years to come.
Sam Peters is a freelance writer and avid blogger. She specializes in business news & trends and has had an interest in the oil industry from an early age.
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