How Energy Flows Shape Geopolitics – and Vice Versa?

By Mission Grey

Energy flows act as the lifeblood of both geopolitical strategies and global economic systems. Geopolitically, they define alliances, conflicts, and influence. Economically, they sustain industrial growth, trade, and innovation.

Countries and businesses which can adapt to the shifting energy landscape — integrating renewables, diversifying supply chains, or investing in new technologies — will be best positioned to thrive in the global marketplace.

Efficient, stable supply of energy is foundational for industrial operations, trade, and overall economic growth.

However, changes or disruptions in energy flows can ripple across global markets, leading to price volatility, economic slowdowns, and even social unrest.

For instance, the energy crisis in Europe over recent years resulting from the Ukraine war has driven up natural gas prices by 45% and imposed record-high electricity costs, destabilizing industries and cost-sensitive residential sectors. This has led to heavy investments in new energy sources like liquefied natural gas (LNG) infrastructure and renewable energy solutions.

In this article, we examine two examples of how energy transit routes shape our geopolitical and geoeconomic future -- and, on the other hand, how geopolitics shapes these routes. The cases are more than topical: the first one from Europe and the second one from the Middle East. 


Estlink 2, the Baltic Sea Submarine Cables, and the European Energy Battle

On December 25, 2024, Finland’s Estlink 2 submarine power cable — linking it with Estonia — suffered reductions in capacity due to suspected sabotage. The implicated vessel, the Eagle S, was tied to the so-called Russian shadow fleet.

Finnish authorities detained the ship, citing possible deliberate acts, such as dragging anchors to sever cables. This marked another instance of hybrid operations suspected to be part of Russia’s conflict strategy. The incident strained regional energy security but did not result in immediate outages for Finland or Estonia.

But what is this Russian shadow fleet and why should one be concerned about it? Shortly, it is a covert collection of aging tankers and cargo ships used to circumvent Western sanctions, particularly related to exporting Russian oil.

Apart from economic implications — such as sustaining Russian oil revenues despite G7 price caps — the fleet demonstrates increasing strategic utility for military and geopolitical purposes. These ships operate without conventional insurance or oversight, raising risks of environmental hazards, and are suspected of enabling covert operations like smuggling weapons or materials necessary for Russia’s war efforts.

Shadow fleet ships are also positioned as potential assets for logistical support in military endeavors, transporting fuel, equipment, and other supplies — a function critical to Russia's ability to operate beyond its immediate sphere of control. The fleet's utility as a dual-use tool for both war and trade is emblematic of Russia's adaptation to economic isolation by Western states.

Moreover, ongoing environmental risks and sabotage incidents — such as oil spills and damage to critical infrastructure — underline their potential as instruments of hybrid warfare.

The Baltic Sea plays a strategic role for Russian oil exports and serves as an operational route for these shadow fleet vessels. Recent NATO and EU measures, such as mandating insurance checks at transit chokepoints, could significantly constrain Russian logistical operations.

If the Baltic is effectively closed to this fleet, Russia’s ability to sustain its off-the-books exports will be crippled, eliminating a key workaround for sanctions enforcement.

The closure also carries broader geopolitical ramifications, including heightened military tension and escalation risks, as Russia could respond aggressively to perceived threats to its economic and naval freedom. The potential introduction of Russian naval escorts for such vessels raises the stakes further, risking incidents at sea involving NATO forces. The economic fallout — both in terms of sanctions circumvention for Russia and increasing costs for its partners — is palpable.

At the same time, there is a wider energy battle going on in Europe. It is primarily tied to the expiration of Ukraine's gas transit agreement with Russia on December 31, 2024, and underscores the complexities of regional energy dependencies.

Ukraine has refused to renew the agreement to transit Russian gas, disrupting its use as an intermediary hub to Europe. The move has angered Slovakia, heavily dependent on Russian gas, leading its Prime Minister Robert Fico to threaten cutting emergency electricity supplied to Ukraine, particularly during wartime grid outages.

Poland has emerged as a key supporter of Ukraine, offering to compensate for any reduced Slovakian electricity supply. Meanwhile, Hungary has also demonstrated a pro-Russia stance, misaligned with broader EU trends aimed at curtailing Russian influence.

These dynamics encapsulate the tension between domestic energy security priorities and the need for regional NATO unity. Slovakia and Hungary’s divergent approaches could weaken EU solidarity on sanctions and energy policy, creating openings for Russian leverage.

It is not only about resources: also transition routes are used as bargaining chips by different actors as the geopolitical map of Europe is reframed on the eve of Donald Trump's inauguration.

At the same time, the wider issue is far from simple: some European economies are still highly dependent on cheap energy for their long-term competitiveness, although may have been able to reject Russian gas and oil for now.

For example, high energy costs have impacted Germany’s manufacturing sectors disproportionately due to their energy-intensive nature. These costs have driven some companies, especially electric steel plants, to halt operations altogether.

The competitiveness of Germany's hallmark sectors, such as steel, chemicals, and automotive production, has dramatically declined as natural gas prices are now almost five times higher than comparable U.S. prices. This dislocation has implications beyond immediate costs — it reshapes global market balance by favoring regions with cheaper energy.

Germany remains a bellwether for energy transition leadership. However, the financial and industrial pressures simultaneously expose its limited ability to buffer aggressive shifts in global competition while transitioning to carbon-neutral energy. Germany has implemented short-term solutions like advocating for capped grid costs and integrating hydrogen-based decarbonized industrial solutions, but experts argue these are insufficient without securing intensified “friendshoring” strategies with allied nations to increase renewable imports and stabilize supply.

Longer-term industrial strategies, involving pipeline-based energy transfer from Southern and Eastern Europe, could present better efficacy instead of subsidizing non-viable domestic sectors – which takes us to the second example.


Transition in Syria — a Geoeconomic Game Changer?

The Qatar-Turkey pipeline project, sometimes referred to as the "New TurkStream," would connect Qatar’s massive natural gas reserves in the Persian Gulf to European markets through Turkey.

This ambitious pipeline could have profound implications for global geopolitics and geoeconomics. This pipeline, if completed, might very well challenge the energy dominance of traditional power players like Russia and Iran.

By diversifying Europe's natural gas supply sources, it reduces dependence on Russian energy, aligning with EU and NATO strategies. For Iran, the project represents a loss in influence, particularly as it disrupts its intended pipeline networks through neighboring territories. The pipeline cuts through existing political rivalries that might intensify, especially between the Gulf Cooperation Council (GCC) states and Iran.

If realized, the TurkStream 2 pipeline could achieve what decades of European energy policies and diversification strategies have aimed to ensure: reliable access to non-Russian gas sources. Russian responses, such as further exploitation of energy pricing or fostering closer ties with non-European markets, might mitigate some of these losses. However, the emergence of a Gulf-Europe energy corridor would mark a substantial shift in global energy diplomacy by weakening Russia's traditional influence in this sphere.

The pipeline's route through war-torn Syria underscores Syria's strategic importance as a conduit for regional projects. However, geopolitical instability in Syria (post-Assad regime) remains a principal factor. The ability of a new government to control its territories and provide a secure environment for prospective investors will be critical. It is worth noting that the earlier rejection of this pipeline by Assad's government (linked to preserving Russian and Iranian interests) reflects how Syria aligns, which could shift fundamentally under a new administration.

Hakan Fidan, Turkey's Foreign Minister, has played an instrumental role in engaging with the new leadership in Damascus. His meeting with Ahmed al-Sharaa underscored Turkey’s strategic focus on fostering stability in Syria and aiding the refugee repatriation process.

In fact, Fidan's visit symbolizes Turkey's broader regional aspirations. By fostering ties with Syria’s new leadership, Ankara seeks to play a decisive role in the region's reconstruction and power rebalancing. It is hard to overstate the impact Turkish-Syrian relations have on the future plans in the field of energy infrastructure, and therefore, also wider geopolitical development not only in the Middle East, but also in Europe, and globally.


(Image: Tony Webster - Black Hills Energy Gas Pipeline - Laramie - Wyoming, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=156599607)