Geopolitical tensions are the conflicts and rivalries between nations that arise from their geographical, political, and economic interests. They can manifest as military confrontations or diplomatic disputes, significantly influencing global relations and power dynamics. They played a significant role in both World Wars, as regional conflicts grew into global wars and alliances formed around shared interests.
Resources, including fossil fuels and critical minerals for renewable energy technologies, fuel competition among nations and are central to geopolitics. Nations that possess and control these resources gain a degree of influence that extends beyond the region where they are located, impacting global energy prices, supply chains, and even international security. The urgency of climate change adds a new dimension to geopolitics as countries compete for leadership in renewable energy technologies and critical mineral supplies.
A refined understanding of this issue is needed, moving past simple notions of resource competition and power struggles to a more academic interpretation that reveals the deeper structural contradictions driving these tensions. This requires a systems perspective that goes beyond linear cause-and-effect relationships to embrace complex feedback loops and unintended consequences across all relevant interacting systems – from the global energy system to the ecological and planetary political systems.
These multifaceted complexities present business risks that require companies to reconsider their sourcing strategies and production locations. The ongoing trade conflict between the US and China, which nearly half of CEOs cite as their top economic geopolitical risk to business operations in 2025, for example, could lead to higher production costs or retaliatory trade measures that impact global markets and global growth.
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