‘Data is the new oil’ is one of those phrases that sounds insightful until real-world events force a reality check. The current Iran-US-Israel confrontation and tensions around the Strait of Hormuz have reminded the world that oil is still a hard, physical bottleneck that can disrupt daily life within days, from petrol pumps to gas bills. Data breaches and digital surveillance, by contrast, often feel distant and abstract for most people, even when they are profoundly harmful. This gap between rhetoric and lived experience tells us something important, the oil metaphor is doing more harm than good in how societies think about data, power and regulation. This blog tells why the analogy ‘data is the new oil’ breaks down along several dimensions, rivalrous versus non-rival goods, context and relationality, geopolitics and the way law and policy have started to respond.

Where the Slogan Came From

The idea caught emphasis after British data scientist Clive Humby is widely credited with coining ‘data is the new oil’ in 2006 to capture the idea that raw data, like crude oil, must be refined to unlock economic value. Consultants and tech leaders found it attractive because it compresses a complex shift in capitalism into a single catchy image that is invisible streams of data supposedly fueling a new kind of growth just as fossil fuels powered the industrial age. In India, the phrase has been frequently echoed by government officials and commentators to justify investments in digital infrastructure and data-driven governance, from Aadhaar-based systems to open data platforms. Yet, as critics in technology policy and economics have pointed out, such metaphors are never neutral, they ponder which questions are asked and which harms get ignored. If data is treated as just another extractive commodity, debates about privacy, power asymmetries and structural discrimination are easily sidelined in favour of growth narratives.

Non-Rival and Reusable

The first big problem with the oil analogy is that oil is rivalrous and exhaustible, whereas data is non-rival and can be reused endlessly. When a barrel of oil is burnt, it is gone, when a dataset is used, it can be copied, combined and analysed again without being ‘used up’. This means the underlying economic logic is closer to that of knowledge or infrastructure than to a finite natural resource. Oil is also largely fungible, one barrel of a given grade is interchangeable with another, which is why it trades smoothly on global commodity markets. Data is deeply non-fungible, a dataset about health outcomes in rural area cannot simply be swapped with one about consumer preferences in an urban city and their value depends entirely on the questions being asked and the systems into which they are integrated.

Data versus Oil

The current Iran-US-Israel crisis shows, in painful real time, how oil functions as a geopolitical bottleneck. The Strait of Hormuz handles roughly a fifth of global crude flows and conflict there has quickly pushed benchmark crude prices above 100 US dollars per barrel as shipping risk and insurance costs spike. Ceasefire conditions by Iran describe that the Strait ‘will not revert to pre-war normal’ which have fueled a price surge of more than 40 per cent in barely over two weeks. Separate maritime data suggests that while traffic has not stopped entirely, it has been significantly interrupted, with many tanker transits for friendly nations including India and attacks on vessels of non-friendly nations adding to the sense of crisis. For ordinary households in India or Europe, this translates quickly into higher gas bills, inflationary pressure and anxiety about energy security.

The chain from this disruption to everyday hardship is visible and relatively direct, which is why oil politics have long been a staple of strategic studies, election campaigns and geopolitical dialogues. Data harms rarely announce themselves in this way. When a platform silently collects behavioural data or issues policies based on opaque datasets, there is no equivalent of petrol queues the next day. Instead, the damage shows diffusely, discriminatory credit scoring, exclusion from certain incentives due to faulty databases, dissent due to pervasive surveillance and miscarriage of justice driven by algorithms. These are slower-burning crises, affecting dignity, autonomy and rights rather than fuel gauges.

Different Bottlenecks

Another way the analogy breaks down is in how things works. Oil and gas flows through narrow geographic straits and pipelines that can be physically blockaded or attacked, as the Hormuz tensions repeatedly remind the world. Control over these passages is tied to territorial sovereignty, naval power and formal alliances. Data flows, by contrast, are routed through fibre-optic cables, satellite links, cloud platforms and content delivery networks. The problems here are not just geographic but institutional, a handful of dominant cloud providers, social media platforms, app stores and operating systems mediate much of the world’s digital traffic. States can still coerce or shut down these networks, but they typically do so through legal orders, licensing and extra-legal pressure rather than warships.

In other words, oil hinderances are about direct physical disruption, whereas that of data operate via governance, standards and corporate control. A government can throttle internet speeds or order a platform to take down content; it cannot ‘burn’ a rival’s data in the same way it can blow up an oil refinery. This calls for a different conceptual vocabulary, one grounded in infrastructure governance instead of extractive geology.

Law, Policy and the Danger of Commodity Value

The oil metaphor has also shaped data protection debates in India and elsewhere. If data is seen simply as a high-value commodity, then the regulatory focus naturally shifts to ‘who owns it’ and ‘how can it be monetised’, rather than to questions of power, rights and accountability. This is visible in policy narratives that treat citizens’ personal information as a national resource to be harnessed for innovation, often with limited attention to meaningful consent or redress. An excessive focus on economic value presumes that all data can be generated and harvested, and valued only economically, ignoring the fact that data is embodied and relational. It also situates India’s Digital Personal Data Protection Act 2023 within a global trend of regulations such as the European Union’s GDPR and Privacy Act of US that recognise both the potential and the risks of large-scale data processing.

The point is not that these laws are perfect, but that they treat data governance as a question of rights and obligations, not just of extraction. Similarly, the National Data and Analytics Platform (NDAP) stresses that the public value of data depends on building coherent ecosystems such as standards, interoperable systems and user-centric interfaces that allow government data to be used by researchers, civil servants and citizens. Here data looks less like a barrel of oil to be sold and more like a public infrastructure layer whose governance will shape what kinds of research and accountability are possible.

Surveillance Capitalism and the Limits of the Oil Analogy

Surveillance further complicates the picture where contemporary digital capitalism rests on the extraction of behavioural data and its transformation into predictions and nudges, subordinating work and life to continuous monitoring. Surveillance capitalism notes that this model hides labour and struggle, creating a political impasse by naturalising data capture as inevitable and technocratic. Oil metaphors do not fully capture this dynamic because they focus on resource scarcity rather than asymmetries of knowledge and control. The core issue is not that tech firms will ‘run out’ of data, but that they accumulate such rich behavioural profiles that users and regulators struggle to see or contest how those profiles are used. Where oil encourages thinking about nationalisation, cartels and price caps, data demands concepts like informational self-determination, algorithmic accountability and collective bargaining over digital rights.

Conclusion

The Iran–US–Israel confrontation and the threats around the Strait of Hormuz are a timely reminder that oil remains a brutally tangible lever of global power. Tanker traffic can be disrupted, benchmark prices can spike by more than 40 per cent in days, and governments can feel immediate pressure from voters as fuel and food prices climb. Data, by contrast, exerts power in more invisible, long-run ways through profiling, surveillance and the quiet narrowing of civic space. Both matter enormously, but they operate on different logics.

Clinging to the ‘data is the new oil’ slogan suggests a world of scarcity and barrels when what is actually at stake is a world of relationships, infrastructures and rights. In policy debates, whether about India’s data protection law, platform regulation or digital welfare systems, it is time to give due importance to oil and adopt language that does justice to the distinctive nature of data and its harms.