The paper explores the economic impact of sanctions imposed by sanctioning states on their energy industries.
Sanctions initially led to a short-term increase in energy stock returns for energy firms in sanctioning countries, particularly in NATO member states and flawed democracies, compared to non-NATO states and fully democratic countries. However, this positive effect diminishes over time as market participants and firms adapt to the new conditions. This adjustment can arise from a variety of factors, such as businesses’ modifying their operations, supply chains and alliances to lessen the effects of sanctions, or investors’ reassessing their expectations in accordance with the evolving geopolitical situation.
Read the full article.
