Reflections on Power, Diplomacy, and Strategic Foresight

By José Parejo, Founding Partner, José Parejo & Associates

In 1911, the British Admiralty made a decision that reshaped global power.

The Royal Navy abandoned coal and converted its fleet to oil. The choice was strategic rather than technological. Oil-powered ships were faster, more efficient and easier to refuel. But the decision created a new dependency: Britain would no longer rely on domestic coal. It would rely on energy routes stretching across the Persian Gulf.

Winston Churchill, then First Lord of the Admiralty, summarised the dilemma with remarkable clarity:

“Safety and certainty in oil lie in variety and control of supply.”

More than a century later, the global economy still operates within that logic. Power increasingly depends not only on resources, but on the reliability of the systems that transport them.

From Industrial Warfare to Systemic Competition

Twentieth-century warfare focused on destroying production.

Factories, railways and industrial centres were the decisive targets of strategic power. Allied bombing campaigns during the Second World War aimed precisely at that objective: dismantling the industrial base that sustained German war capacity.

But the structure of economic power has changed. Modern economies are no longer organised primarily around isolated industrial centres. They are structured around interconnected global systems: maritime corridors, energy transit routes, semiconductor supply chains, financial clearing mechanisms and digital infrastructure.

These systems are extraordinarily resilient. They rarely collapse overnight. Yet they are vulnerable to something more subtle: Friction.

System Friction

System friction emerges when critical infrastructure continues to operate but loses reliability.

Ships still sail, yet insurance premiums surge. Energy continues to flow, yet transport logistics become uncertain. Supply chains function, yet political risk reshapes investment decisions. The system does not break. It becomes harder to trust.

In networked economies, reliability is often more valuable than capacity. Once reliability begins to erode, economic behaviour changes long before physical disruption occurs.

Strategic Pressure in Networked Systems

The Strait of Hormuz illustrates this dynamic clearly.

Approximately one fifth of globally traded oil and liquefied natural gas moves through this narrow maritime corridor connecting the Persian Gulf to global markets. Yet global energy markets do not require a full closure of the Strait to react.

Even partial instability introduces systemic friction:

• war-risk insurance premiums escalate

• shipping companies alter routes

• transport costs increase

• delivery schedules become uncertain

Markets respond to the perception of risk as much as to physical disruption.

Prices move not only when supply disappears, but when logistical reliability declines.

A Classical Perspective

This strategic logic would not have surprised Thucydides.

In his account of the Peloponnesian War, power is rarely portrayed as a matter of brute force alone. It often emerges from the ability to shape the strategic environment in which adversaries must operate. Modern geopolitical competition increasingly follows this pattern. Critical systems become arenas of strategic pressure:

energy corridors
technology supply chains
financial networks
logistics infrastructure

The objective is rarely immediate collapse, but to introduce enough uncertainty into the system that economic actors begin to adapt.

The Corporate Dimension of Geopolitics

For corporate leaders, investors and institutions, this transformation alters how geopolitical risk should be understood.

Traditional analysis tends to focus on visible shocks: wars, sanctions, political crises.

But in networked economies, the most consequential signals often appear earlier.

Insurance markets shift.
Shipping routes adjust.
Commodity futures reprice expectations.
Supply chains begin to diversify.

By the time disruption appears in production statistics, economic actors have often already absorbed the cost.

Strategic Signals: Three indicators frequently reveal whether systemic friction is temporary or structural:

Insurance markets: The restoration of normal war-risk coverage signals confidence in logistical stability.

Shipping flows: Sustained tanker traffic through strategic corridors indicates that operational reliability has returned.

Forward energy markets
Commodity futures reflect expectations about supply continuity and transport risk.

When these signals stabilise together, the system is recovering. When they diverge, structural change may already be underway.

Reliability as Power

In networked economies, power increasingly operates through the reliability of systems rather than the destruction of assets.

Strategic competition is therefore shifting from controlling territory or resources, towards shaping the conditions under which global systems operate. And in those systems, reliability is the foundation upon which markets, supply chains and investment decisions ultimately depend.

When reliability weakens, the effects propagate quickly, because in interconnected economies, friction rarely remains local.

It travels. At JPA, we help organisations navigate before friction becomes disruption.

— José Parejo

Founding Partner, José Parejo & Associates

Sunday CEO Strategic Insights | March 15, 2026

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