Reading the Global Energy Situation Amid a Polarised World

The world today is not merely experiencing fragmentation but has entered a phase of increasingly intense and potentially systemic geopolitical tensions. Rivalries between major powers, open armed conflicts, and disruptions to strategic trade routes have shaped a global landscape far more unstable than in the past decade.

The Russia-Ukraine war, which has not fully subsided, the escalation of conflicts in the Middle East, and the geopolitical rivalry between the United States and China have pushed the world towards a configuration of power that is increasingly divided and unpredictable.

According to Wang et al. (2024), the linkage between geopolitical dynamics and energy security has strengthened in recent decades, marked by growing global attention to how international conflicts and tensions affect energy supply stability. This is reinforced by findings from Yilmazkuday (2024), which show that increased geopolitical risks significantly drive global energy uncertainty, ultimately impacting energy price fluctuations and economic stability in various countries.

Furthermore, the International Energy Agency (IEA) 2025 report affirms that energy is now increasingly at the centre of global geopolitical tensions, making it a strategic factor in determining the direction of economic policies and international relations.

Global Geopolitical Polarisation

Global polarisation is now evolving beyond mere ideological differences towards competition for economic influence, technology, and control over strategic resources, particularly energy. The Russia-Ukraine conflict has deepened the divide between the Western bloc and Russia, while countries like China and India adopt more flexible positions to safeguard their energy and economic interests.

However, the most significant development is occurring in the Middle East in 2026. The region has once again become the epicentre of global crisis following the outbreak of a large-scale conflict involving Iran, the United States, and its allies. One of the most crucial impacts is the disruption of the Strait of Hormuz, a vital trade route previously handling around 20% of the world’s oil supply. Since late February 2026, this route has faced extreme disruptions, nearly halting operations, with over 90% of global energy shipping activities affected.

These disruptions are not only physical but also exacerbated by rising maritime security risks, including drone and missile attacks, as well as manipulations of ship navigation systems. As a result, energy logistics costs have surged dramatically, while shipping risk premiums have risen sharply. In some cases, certain countries have even begun restricting access to energy routes solely to specific geopolitical partners, further emphasising global fragmentation.

Impacts of the Global Energy Crisis

The current energy crisis is a combination of extreme supply disruptions and rising geopolitical uncertainty. The closure or restriction of major energy distribution routes has caused oil prices to surge above USD 100 per barrel, even reaching over USD 120 during certain conflict periods.

Moreover, the impacts of this crisis extend beyond the energy sector. Disruptions in gas, fertiliser, and even helium supplies indicate that the energy crisis has spilled over into global industry and food sectors. This heightens the risk of global inflation, weakens economic growth, and even opens the potential for stagflation in various countries.

Developing countries are the most vulnerable group due to their high dependence on energy imports. Rising energy prices drive up production costs, increase the prices of goods and services, and squeeze consumer purchasing power. In some cases, this situation could potentially trigger social and political instability.

Nevertheless, this crisis is also accelerating the global energy transition. Countries are beginning to recognise the importance of energy diversification, consumption efficiency, and the development of renewables as long-term strategies to reduce vulnerability to geopolitical turbulence.

Indonesia’s Position Amid the Crisis

Indonesia finds itself in a dilemmatic position. On one hand, it possesses abundant energy resources such as coal and nickel, offering strategic opportunities amid the global crisis. On the other hand, dependence on oil imports remains a major weakness.

The surge in global oil prices directly increases pressure on the state budget, particularly through energy subsidies. Additionally, disruptions to global distribution routes, such as those in the Strait of Hormuz, pose a real threat to national energy resilience, given that much of Indonesia’s energy imports still rely on that route.

Nonetheless, this situation also opens opportunities for Indonesia to strengthen its position in the global energy supply chain, particularly through nickel downstreaming for electric vehicle battery industries. Government efforts to promote downstreaming and renewable energy development serve as strategic steps to reduce reliance on fossil fuels.

Gauging Indonesia’s Strategy to Face the Crisis

In facing increasingly unstable global dynamics, Indonesia needs to adopt more adaptive and integrated strategies. Diversifying energy sources is a key step to reduce dependence on oil imports. Strengthening energy infrastructure, including the construction of refineries and distribution networks, is also a vital priority.

On the other hand, accelerating the transition to renewables must be pursued consistently. The development of solar, geothermal, bioenergy, and energy storage technologies will form an important foundation for building a more resilient energy system.

Energy diplomacy also serves as a strategic instrument that cannot be overlooked. In an increasingly fragmented world, Indonesia’s ability to maintain access to global energy sources through international cooperation will be highly crucial.