Currently, it is a fact that many of the world’s leading oil producing countries are either politically unstable or are at serious odds with the USA. In the past, a country’s military was the sole arbiter of her strength, but today it is the economy that has become nearly as important and all industrial economies and militaries both run on oil and gas. The current world financial turmoil has created more insecurities than ever before. This paper focuses on the current geopolitical issues underlying the oil supply in the world. The US and China desire those resources to fuel their power plants, factories, automobiles, aircraft, and armored vehicles. Iran and Russia want the pipelines to go through their territory in order to claim transit fees and use the resources as political tools. The recent political development in Iraq, Libya, Egypt, Yemen and other small Arab nations has given another twist to the old geopolitics in the region. This paper analyzes the factors that make and break international relations between countries with regard to oil supply. In this context, the paper also examines the position of India vis-à-vis the changing scenario in the geopolitics of the world.

Oil and natural gas are the fuels for modern capitalism. However, oil history is tarnished with violence, conflicts, repression and interventionism. The main reason for this can be attributed to the fact that this valuable resource is not found uniformly across the world. Some geographical locations are endowed with more of this resource and other regions have to depend on them for meeting their demand.

According to the US Geological Survey, over 50% of the undiscovered reserves of oil and 30% of gas are concentrated primarily in Saudi Arabia, Iran, Iraq, Kuwait, UAE and Libya. This means that as long as the modern economy depends on the supply of oil and natural gas, the Middle East will play a key role in global politics and economy. This demand-supply imbalance shapes this industry and the bigger players always have an edge over the smaller players leading to upheavals and socioeconomic- political unrest.

International Relations Journal, US Geological Survey, World Energy Outlook, Historical Perspective, Control the Oil, Rule the World, Iraq, Libya, Egypt, Yemen, The Energy Games Nations Play.