[Answered] Examine the role of AI and energy in redefining global rules within a fragmented world order. Analyze the impact of stable oil prices, despite geopolitical volatility, on the competitive corridor between fossils and renewables and its implications for international strategic autonomy.

Introduction

By 2026, amid wars, sanctions and supply shocks, stable oil prices and rapid AI diffusion signal a shift in global power, where technological capability and energy resilience increasingly define strategic autonomy.

Fragmented World Order and the Changing Grammar of Power

1. From Rule-based Multilateralism to Transactional Realism: The contemporary world order is no longer anchored in shared norms but in transactional bargains driven by relative power. Military strength and GDP now coexist with technological depth and energy security as determinants of influence. Institutions persist, but compliance is selective, producing a fragmented, interest-driven geopolitics.
2. Hierarchy over Ideology: In this hierarchy, attention gravitates toward regions of strategic value, not humanitarian urgency. This explains why energy chokepoints, AI supply chains, and semiconductor hubs command greater diplomatic focus than climate vulnerability or civil conflicts.

Artificial Intelligence as a Rule-Making Instrument

1. AI as Strategic Infrastructure, Not Just Technology: AI has transitioned from a productivity tool to sovereign infrastructure. Control over the AI stack—data, algorithms, compute power, and energy-intensive data centres—now underpins governance, defence, and economic competitiveness. Reports by OECD and McKinsey estimate AI could add $13–15 trillion to global GDP by 2030, but benefits remain uneven.
2. Geo-economic Leverage and Digital Asymmetry: Countries leading in AI standards and platforms shape global norms by default. The US–China rivalry over chips, export controls, and model governance illustrates how AI is redefining rules without treaties. Nations lacking AI capacity risk becoming ‘digital dependents’, deepening North–South divides.

The Oil Paradox: Stability Amid Geopolitical Turbulence

1. Structural Supply Buffering Volatility: Despite sanctions on Russia, instability in West Asia, and collapsing producers like Venezuela, oil prices have remained relatively stable.According to IEA (2025), non-OPEC supply growth from the US, Brazil, and Guyana has structurally exceeded demand growth, acting as a geopolitical shock absorber.
2. Decoupling Conflict from Energy Panic: Unlike the 1970s oil shocks, contemporary conflicts no longer automatically translate into price spikes. This weakens the coercive power of energy disruptions and alters strategic calculations for both producers and importers.

The ‘Narrowing Competitive Corridor’: Fossils vs Renewables

1. Economic Headwinds to the Green Transition: Stable fossil fuel prices compress the cost differential between fossils and renewables. For developing economies, this narrows the economic incentive to rapidly decarbonise, especially when green technologies face mineral constraints.
2. Critical Mineral Bottlenecks: Energy transition is no longer carbon-constrained but mineral-constrained. S&P Global projects a 10 million-ton copper deficit by 2040, while lithium, cobalt, and rare earths are geopolitically concentrated, raising the risk of replacing oil dependence with mineral dependence.
3. Industrial Policy Replacing Price Signals: As market signals weaken, states increasingly rely on industrial policy.  Subsidies, PLIs, carbon border adjustments, and localisation rules turn the energy transition into a race for factories, jobs, and supply chains, not merely emissions reductions.

Implications for Strategic Autonomy

1. Energy-AI Convergence as Power Multiplier: Strategic autonomy now lies in integrating AI with energy systems. AI-enabled grids, demand forecasting, and storage optimisation enhance resilience, while domestic manufacturing reduces exposure to external shocks.
2. India’s Balancing Imperative: For India, stable oil prices offer fiscal space but also strategic temptation. Long-term autonomy demands diversification—renewables, nuclear, alternative batteries, and indigenous AI capacity—while maintaining diplomatic flexibility in a transactional world.

Conclusion

Echoing Dr A.P.J. Abdul Kalam’s vision of self-reliance, true strategic autonomy lies not in reacting to volatility, but in mastering technology and energy together to shape, not follow, global rules.