Global Conflicts Impact Energy Market: AMR’s Thought-provoking Poll

The ongoing geopolitical conflicts around the world have significantly impacted the global energy landscape, influencing supply chains, market stability, and energy prices. Economies face serious impacts due to the energy wars and face challenges to manage their limited fossil fuel reserves. Although these conflicts have negatively impacted the economies, they have realized the importance of diversifying energy sources and not relying on imported energy from a single supplier, thereby increasing the significance of energy security among nations.??

Understanding how these conflicts shape the renewable energy sector is crucial for industry stakeholders. To gain insight into their perceptions, a poll was conducted by Allied Market Research involving 700 energy professionals, asking "Which conflict impacts global energy the most?" The response options were Russia–Ukraine War, Middle East conflicts, and Yemen Houthi attacks.?

Russia–Ukraine War Dominates with 71% of Votes?

With 71% of respondents indicating the Russia–Ukraine war as the most impactful conflict, it is evident that stakeholders recognize this war's profound influence on global energy markets. The war has disrupted the supply of oil and natural gas from Russia, one of the world's largest exporters, significantly affecting Europe, which heavily relies on Russian energy. According to estimates from the International Energy Agency, Europe imported approximately 40% of its natural gas from Russia prior to the conflict in 2021. Since the war began, European countries have been diversifying their energy sources to reduce reliance on Russian energy, leading to increased global demand for liquefied natural gas from the U.S. and other countries.?

Moreover, the conflict has triggered a surge in global oil prices. The Organization of the Petroleum Exporting Countries reported in 2022 that the price of crude oil reached $120 per barrel shortly after the invasion, representing a nearly 60% increase from the previous year. This volatility in energy prices underscores the Russia–Ukraine War’s disruptive impact on the energy market.?

Middle East Conflicts Garner 29% of Votes?

Middle East conflicts received 29% of the votes, reflecting stakeholders' recognition of the region’s long-standing role in global energy production. The Middle East, home to major oil producers like Saudi Arabia, Iraq, and Iran, has been a focal point of energy market disruptions. Ongoing tensions and conflicts, such as the U.S.–Iran standoff and instability in Iraq, continue to influence oil supply routes and market stability.?

For instance, the Strait of Hormuz, a vital shipping route through which around 20% of the world’s oil passes, remains a potential breakthrough due to regional conflicts. A 2019 estimate by the U.S. Energy Information Administration highlighted the strategic importance of the Strait, noting that an average of 21 million barrels of oil per day transited through this chokepoint, highlighting the potential risk of supply disruptions.?

Yemen Houthi Attacks Receive No Votes?

Yemen Houthi Attacks received no votes, indicating that while the conflict in Yemen has occasionally disrupted energy infrastructure, such as Saudi Arabian oil facilities, it is perceived as having a limited impact on the broader global energy market. This may be due to the relatively localized nature of these attacks and their comparatively smaller influence on global supply chains.?

?Poll Insights?

The poll reveals that the Russia–Ukraine war is seen as the most significant conflict impacting global energy markets, with the Middle East conflicts also playing a notable role. While stakeholders did not view the Yemen Houthi attacks as a major factor, the overall results emphasize the critical influence of geopolitical instability on energy supply and prices.?

For further insights, get in touch with AMR analysts.?