The economic and energy security implications of the Russian energy weapon

Abstract

The Russian–Ukrainian war of 2022 sent shockwaves through the global economy and disrupted energy markets on an unprecedented scale. The conflict not only caused extensive devastation in Ukraine but also triggered a commodity supply shock in various international markets. In this paper, we look at the impacts of this energy weapon and the global consequences of its use. We investigate the interplay between gas market fluctuations, energy price shocks, and trade dependencies, while offering insights into building resilient global systems for a sustainable and secure energy futures. Using a novel approach we combine energy trade modelling and integrated assessment modelling to compare a hypothetical counterfactual scenario, with no price and supply shock, to a scenario of disrupted trade and regionalized gas prices. We conclude that the Russian energy weapon had only had short-term economic consequences, but influences energy-system transformation in the EU, accelerating diversification and renewable deployment.