Energy security in the 2020s is no longer defined primarily by physical resource abundance, but by the strategic behaviour of major powers, the interdependence of global markets and the institutional structures governing hydrocarbon trade and investment. Intensifying rivalry between the U.S. and China, combined with the policy choices of resource-rich middle powers such as Australia, is reshaping risk-sharing mechanisms and investment incentives across the global oil and gas system. This paper applies a game-theoretical framework to analyse vulnerabilities and cooperation pathways across three archetypes: (i) a U.S.–China ‘prisoner’s dilemma’ concerning energy flows and technological (and political) leverage; (ii) a ‘stag hunt’ between liquefied natural gas exporters and importers, where stable investment requires aligned expectations; and (iii) a triangular bargaining process between governments, international producers and domestic consumers in resource-rich jurisdictions. These games are set within a historical perspective on energy transitions, six structural mismatches in the global oil and gas system, and the strategic behaviour of five global energy power centres. The unsuccessful acquisition of Santos by the Abu Dhabi National Oil Company is used as a case to illustrate these dynamics for a resource-rich middle power, Australia. We argue that energy security is determined less by reserves than by credible commitments, institutional design and the ability of states and companies to sustain robust interdependence under geopolitical stress. Our analysis suggests that durable stability requires a strategic shift from zero-sum rivalry towards repeated-game cooperation, anchored by transparent rules, diversified portfolios, shared infrastructure and policy mechanisms that dampen volatility and support predictable investment cycles.
Wu et al. (Wed,) studied this question.
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