The recent disruptions in oil trade have demonstrated the importance of multiple access routes to markets and infrastructure capable of absorbing shocks, at a time when geopolitical risks and bottlenecks facing the global energy system are increasing.
This was confirmed by the Secretary-General and CEO of the World Energy Council, Angela Wilkinson, in an exclusive interview with Asharq Al-Awsat, days before her participation in Energy Week in Riyadh, explaining that the system’s ability to deal with disturbances is not related to the volume of production alone, but also to the infrastructure, transportation networks, and relations between producers and consumers.
The activities of “Riyadh Energy Week,” which hosts the 25th session of the World Energy Conference, will begin in Riyadh, Sunday, for the first time in Saudi Arabia, with the participation of more than 70 ministers, more than 300 CEOs of major international energy companies, and leaders of more than 25 international organizations.
The conference, which is held under the slogan “Paths to an Energy Future for All,” includes more than 30 ministerial, strategic and leadership sessions, covering energy security, global oil and gas markets, investment and finance, artificial intelligence and digital transformation, critical minerals, carbon management, natural gas, and the future of the energy mix.
Hormuz tests the flexibility of the energy system
Wilkinson believes that energy “underlies every aspect of life in the modern world,” and therefore the global priority is to reduce the escalation in the regional conflict that leads to a crisis in the global energy and economy. She said that energy sector leaders today are working in a new geopolitical context, while communities in different regions face multiple shocks and bottlenecks extending from transportation and refining routes to liquefied natural gas, electricity networks, and critical minerals.
She explained that the trade-offs between energy security, equitable access and affordability, and environmental sustainability have not disappeared, but they have changed and become more acute, which makes rebalancing them in real time essential for achieving sustainable progress. This was based on the results of the “Global Energy Trilemma 2026” report, which was prepared by the Council after dialogues with more than 275 energy sector leaders in 65 countries.
She added that the longer-term impact of the crisis, whatever its duration, may be how sector leaders cooperate to enhance resilience, integration and operational compatibility, and build systems capable of absorbing today’s disruptions and better preparing for future shocks and transformational opportunities.
Saudi Arabia and multiple access paths
Wilkinson said that Saudi production capacity and alternative export infrastructure play an important role in global energy markets, especially when existing paths are exposed to disruption. She explained that recent developments have shown that “there is no single path that eliminates all risks,” and that energy security depends on a strong infrastructure, multiple paths to access markets, and greater cooperation between producers and consumers.
She added that the flexibility of the energy system in the Gulf region cannot be measured only by the amount of energy that the region can produce, but also depends on its ability to transfer that energy reliably through ports, pipelines, electricity networks, and international markets.
She pointed to investments in new infrastructure, strengthening networks, and increasing diversity of partnerships as factors that increase the options available to the system. She summarized the concept of flexibility as “building a degree of choice within the system,” through diversification of energy sources, multiple paths to market access, strong infrastructure, and strong international relations.
From supplies to “capabilities”
Wilkinson does not believe that the crisis changes the need to balance energy security, equity and affordability, and environmental sustainability. But she explained that what is changing, sometimes very quickly, is where pressures are increasing and new bottlenecks are emerging.
She said that the trade-offs managed by energy sector leaders have moved with geopolitics, technological innovation, the effects of climate change, increasing demand activity and industrial competitiveness to new parts and locations of the global energy system.
She believes that the biggest transformation may be the transition from a world in which the energy system was organized around supplies to a world that is increasingly moving toward organizing around “capabilities.” The Council is responding to this shift by developing the “global energy trilemma” from a measurement framework into a leadership dialogue that addresses systems integration and resilience, energy security, and industrial competitiveness.
She emphasizes that integration is not limited to a technical challenge related to setting standards, but is also related to the institutional, financial and human capabilities necessary to make the components of the energy system work together efficiently.
Geopolitics and new dependencies
Wilkinson expects that over the next five to ten years the importance of geopolitics in decisions related to interdependence in the energy sector will increase. Electricity, artificial intelligence, new technologies and growing demand will remain important factors, but they are evolving in a more fragmented and competitive world.
She explained that countries are discovering that reducing a certain dependence may lead to the emergence of another dependence, whether on critical minerals, technologies, manufacturing capabilities, or infrastructure.
She believes that how leaders manage these interconnected dependencies, and bridge the growing capacity gaps, will contribute to shaping the energy system over the next decade.
A “super cycle” of electrification
As demand for electricity accelerates, Wilkinson believes that the biggest constraint on the electrification “supercycle” is not a specific technology, policy or infrastructure, but rather the ability to make the entire energy system operate efficiently.
She explained that this requires generation, electricity networks, storage, and investment, while expanding each of these elements leads to the emergence of new dependencies on supply chains, critical minerals, aging infrastructure, and a skilled workforce.
She stressed that the dissemination of energy technologies remains necessary, but making these technologies work together represents an increasing challenge and requires new capabilities.
There is no single universal path to transformation
Wilkinson rejects the idea that there is a single global path for transformation in the energy sector, explaining that there are multiple paths and transformations that are shaped according to resources, infrastructure, and different economic and social needs.
The work of the Global Energy Trilemma shows that sector leaders are having to rebalance energy security, equity, affordability, and environmental sustainability more frequently and dynamically.
She said that the challenge is to push these multiple priorities together, because neglecting any of them may create weaknesses in another aspect of the system. The question is not whether the transition should be faster or slower, but rather how it can be phased in to build reliable, affordable and sustainable energy services capable of meeting the growing demand for clean electricity and future fuels.
Between sovereignty and independence
Wilkinson believes that one of the risks that may not be sufficiently appreciated until 2030 is the confusion between “energy sovereignty” and “energy independence,” or the assumption that demand will remain predictable and passive, while becoming more active and influential in shaping the energy system.
She said that modern energy systems are inherently based on interdependence. A country may reduce its dependence on fuel imports, but in return, it increases its dependence on critical minerals and technologies needed to build clean energy systems.
Therefore, energy security does not simply mean moving all elements of the system within national borders, but rather understanding and managing interdependencies. As the global energy system grows, this also requires looking beyond generation capabilities, to include the flexibility of electricity networks, stations, supply chains, and the links between them.
The Director General of the International Monetary Fund, Kristalina Georgieva, warned on Wednesday that the global economy faces increasing threats due to the continued rise in energy prices, record levels of public debt, and risks associated with the investment boom in artificial intelligence, calling on governments to take preventive financial and monetary measures.
Georgieva said, in a speech in anticipation of the annual meetings of the International Monetary Fund and the World Bank scheduled to be held next week in Bangkok, that the global economy is being pulled in two contradictory directions, due to a negative shock in energy supplies resulting from conflicts in the Middle East, versus a positive shock in demand led by artificial intelligence, but it also contributes to increasing inflation, according to Reuters.
She added that “the combined impact of these two forces is very different around the world,” noting that the artificial intelligence boom extends beyond many countries.
Georgieva said that the IMF's new growth forecasts, which will be issued during the Bangkok meetings, will show that the biggest cuts in growth forecasts will affect war-weary economies.
Georgieva did not clarify, in her prepared statements, whether the latest version of the “World Economic Outlook” report would include a change in global growth expectations for 2026, which amount to 3.0 percent, according to expectations last July, a pace described as weak.
These forecasts assumed a recovery in growth to 3.4 percent during the year 2027, on the basis that the Strait of Hormuz would begin to reopen in mid-July and return to pre-war conditions by March 2027. They also assumed that the average price of oil would reach $89 per barrel in 2026, and $78 in 2027.
Georgieva said that oil prices are still at around $100 per barrel, while the affected refining capacity has led to another $100 being added to the “refining spread” margins for each barrel of the main products. Including diesel.
She added that the winter heating season will boost demand, at a time when natural gas supplies are still restricted due to threats facing liquefied natural gas shipments through the Strait of Hormuz.
She said: “Even if the war ends soon, the problem of high energy prices is likely to continue for some time,” noting that Brent crude futures expect oil prices to remain high until 2027.
She stressed that rising energy prices push inflation, basic interest rates, and benchmark bond yields upward, noting that 10-year sovereign bond yields in the United States, Germany, and Japan have currently reached their highest levels since 2007, 2009, and 1996, respectively, and are still on an upward trend.
Debt burdens increase
Georgieva said that the high public debt burden, which saps growth and increases inflationary pressures, represents an additional source of concern that the 191 member states of the IMF will discuss next week.
The IMF says public debt is at its highest level since World War II, and is expected to exceed 100 percent of GDP before 2030.
Georgieva singled out advanced economies, especially the United States, as “the worst” in terms of debt burdens, as their debt-to-GDP ratios exceed the levels recorded in emerging markets and low-income countries.
She noted that policy makers can no longer rely on high growth rates alone to address financial problems.
She added: “However, we do not see decisive action in advanced economies with high debts, where there is an urgent need for reliable plans to control public finances in the medium term, supported in some cases by immediate financial measures, which contribute to alleviating some pressure on monetary policy.”
After five and a half years of inflation exceeding target levels, Georgieva said that inflationary pressures remain, driven by the expansion of artificial intelligence investments, energy and food price shocks, tariffs, increased defense spending, and rising debt servicing costs.
She continued: “Now may be an appropriate time to adopt a monetary approach that tends cautiously toward tightening in a number of countries,” adding that raising interest rates by the US Federal Reserve, the European Central Bank, and the Bank of Japan was “very appropriate.”
Increased risks of artificial intelligence
Georgieva highlighted other risks associated with artificial intelligence, noting that investment in it, as a proportion of GDP, is likely to exceed the levels of investment witnessed in the railways, electricity grids and communications infrastructure sectors.
She said that increasing economic and financial concentration is putting pressure on artificial intelligence companies to achieve gains in productivity and profits that justify their high valuations, warning that market disappointment could turn into a “broad shock.”
But she noted that IMF research shows that artificial intelligence, if properly developed and used, could add half a percentage point to global growth annually.
She said that preparing for artificial intelligence is a key factor, including establishing regulatory frameworks that “help manage the significant risks involved in artificial intelligence, including wide-ranging repercussions on the labor market, serious risks to cybersecurity and stability, as well as the possibility of advanced models escaping from human control and behaving uncontrollably.”
In addition to strengthening public finances, even with the difficult political costs this may entail, Georgieva said that governments must take other steps to support growth, including reforms to develop workforce skills, facilitate the creation and liquidation of companies, enhance energy security, and simplify systems and regulations.
