Alliances, Sanctions, and Supply Chains Redefine Global Energy Strategy

In late October 2025, a series of international developments in security, critical minerals, and energy sanctions highlighted the increasing competition between nations through international policy. Last week, the Trump administration sanctioned Russia’s two largest oil producers, Rosneft and Lukoil, which together account for over 5 percent of global oil output. The sanctions aimed to degrade Moscow’s revenue streams supporting its war in Ukraine. The move triggered immediate market reactions, with oil prices rising and supertanker freight rates on the Middle East–China route jumping 16 percent to a two-year high.

The sanctions placed India in a difficult position. New Delhi had been importing around 1.6 million barrels per day of Russian crude in September 2025, making Russia its largest supplier. The U.S. warned that Indian refiners, banks, and shipping firms could face secondary sanctions if they continued transactions with the blacklisted Russian companies beyond November 21. In August 2025, Washington imposed a 50 percent tariff on selected Indian exports, citing India’s continued purchases of Russian oil. Indian refiners such as Reliance Industries began reviewing operations to comply with Western restrictions, while shifting toward Middle Eastern suppliers, including Iraq, Saudi Arabia, and the UAE.

Despite U.S. pressure, Russian Energy Minister Sergey Tsivilev stated on October 27 that Moscow would be prepared to expand energy cooperation with India, offering liquefied natural gas and plans to increase coal exports to 40 million tons by 2035. He confirmed that Russia’s oil exports to India remained high and that both governments were negotiating maritime agreements to secure energy transport routes.

U.S. officials also advised Hungary to reduce its dependence on Russian oil. Ambassador to NATO Matthew Whitaker emphasized that Washington expected Budapest to develop a plan to end Russian imports and would assist through coordination with neighboring states such as Croatia. The statement followed the cancellation of a planned meeting between Trump and Putin in Budapest and new sanctions on Russian energy firms.

An additional important development came from U.S. President Donald Trump’s visit to Tokyo where he met with Japanese Prime Minister Sanae Takaichi, signing a bilateral agreement to secure supply chains for critical minerals and rare earths. The White House described the deal as a framework to jointly identify projects addressing supply chain gaps for materials such as permanent magnets, batteries, catalysts, and optical components. The agreement followed China’s decision to tighten export controls on rare earths and chip-making equipment.

The U.S.–Japan accord was part of a broader American strategy to diversify critical mineral sources and reduce reliance on China. Earlier in October, the United States had signed an $8.5 billion rare-earths agreement with Australia, while Japan’s state-backed Japan Organization for Metals and Energy Security (JOGMEC) maintained a 65 percent stake in Australia’s production value, ensuring priority supply until 2038. The U.S. Department of War had also guaranteed a price floor of $110 per kilogram for neodymium-praseodymium oxide, nearly double the Chinese market price, to sustain domestic production. These measures reflected a deliberate policy shift toward state-supported industrial resilience, even at higher costs.

In the Western Hemisphere, tensions escalated between the United States and Venezuela. On October 27, two U.S. B‑1B bombers flew near Venezuela’s coast, marking the third such flight since mid‑October. The U.S. also deployed the aircraft carrier USS Gerald R. Ford and additional warships to the Caribbean. Venezuelan President Nicolás Maduro responded by suspending a major gas accord with Trinidad and Tobago after the island hosted a U.S. destroyer for joint exercises. Caracas accused Washington of using anti‑narcotics operations as a justification for a regime change and described the U.S. military buildup as an illegal threat. The suspended Dragon gasfield project, containing an estimated 119 billion cubic meters of gas, had been jointly developed with Shell and Trinidad’s National Gas Company.

Meanwhile, in Africa, Nigerian industrialist Aliko Dangote announced plans to expand his Lagos refinery from 650,000 to 1.4 million barrels per day, positioning it as the world’s largest single‑site refinery. The expansion is aimed to meet rising regional fuel demand and reduce Africa’s dependence on imported refined products.

The October 2025 international developments illustrate how economic and energy policies have become a central aspect of global competition. The U.S. sanctions on Rosneft and Lukoil exemplify the use of economic policy to influence international order. By targeting Russia’s largest oil producers, Washington aims to erode the financial base sustaining Moscow’s war in Ukraine while simultaneously testing the cohesion of BRICS. India’s dilemma highlights the impact of geopolitical leverage being embedded within energy flows. Compliance with U.S. sanctions risks alienating Russia, a long‑term partner, while defiance could trigger secondary sanctions and jeopardize trade negotiations with Washington. The result is a shift in India’s strategic autonomy, as it diversifies toward Middle Eastern suppliers and is forced to negotiate from a position of constrained flexibility.

Russia’s counter‑strategy, articulated by Energy Minister Tsivilev, seeks to deepen energy ties with India and other non‑Western markets to offset Western sanctions. The desired expansion of coal and LNG exports, along with maritime transport agreements, demonstrates Moscow’s intent to remain within Asian energy networks. However, the simultaneous U.S. diplomatic pressure on Hungary and India reveals a coordinated Western effort to isolate Russia from global energy markets.

The U.S.–Japan critical minerals pact represents a strategic effort to undercut China’s dominance in rare‑earth processing, which has long been a structural vulnerability for Western defense and technology industries. By embedding industrial policy into security cooperation, Washington and Tokyo are transforming supply chains into instruments of deterrence. The deal’s emphasis on joint investment signals a shift away from market‑driven sourcing, a key aspect of strategic economic competition.

China’s export controls on rare earths and chip‑making equipment triggered this acceleration. The controls function as a counter‑sanction mechanism, demonstrating Beijing’s capacity to weaponize its near‑monopoly in critical materials. The U.S. response through alliances with Japan and Australia reflects a recognition that diversification will raise costs but is necessary to ensure technological sovereignty. The Department of War’s guaranteed price floor for neodymium‑praseodymium oxide exemplifies how security imperatives now take priority over market efficiency.

In the Caribbean, the U.S. military buildup and Venezuela’s suspension of the Trinidad gas accord highlight the intersection of energy security and coercive diplomacy. The deployment of bombers and warships near Venezuelan waters signals a strategy of compellence aimed at destabilizing the Maduro government. The cancellation of the Dragon gasfield project not only disrupts regional energy cooperation but also underscores how military signaling can directly affect resource agreements. For smaller states like Trinidad, alignment decisions now carry significant geopolitical risk.

Nigeria’s refinery expansion represents a contrasting dynamic: an attempt by an emerging economy to assert energy independence amid global turbulence. The Dangote project’s scale and ambition suggest that regional actors are seeking to protect themselves from external supply shocks and sanctions‑driven volatility.

Overall, these developments reveal a global energy order that is impacted by securitized supply chains, sanctions as instruments of policy, and the militarization of resource corridors. The U.S. is leveraging its financial and military power to reshape global energy alignments, while Russia and China are responding through alternative partnerships and the diversification of their exports. The resulting fragmentation increases systemic risk: higher prices, disrupted trade routes, and intensified competition for investment in refining and extraction capacity. For policymakers, it is becoming increasingly apparent that energy security is no longer a technical or economic issue but a central component of strategic global policy and competition.

- United States

- Japan

- China

- Russia

- India

- Venezuela

- Trinidad and Tobago

- Nigeria