The stock market’s response to geopolitical crises often reflects shifting expectations about profitability, and the Russia–Ukraine war was no exception. This study examines how the invasion of Ukraine, partly in context of sanctions imposed on Russian energy exports, affected the stock prices of energy firms worldwide. By analyzing a dataset of 1,630 energy companies across 75 countries, the research investigates whether different energy sectors (fossil fuels, renewables, and uranium) responded differently to the crisis and how regional market dependencies influenced investor reactions.
The findings reveal a broad positive reaction in energy stock prices following the invasion, but with notable variations across regions and energy types. North American energy firms experienced the strongest gains, as their markets were less reliant on Russian energy supplies. In contrast, European fossil fuel and coal firms saw weaker or even negative returns due to their exposure to supply disruptions. Among energy subgroups, uranium companies outperform others, signaling increased investor confidence in nuclear energy as a long-term alternative to Russian fossil fuels. Renewable energy firms initially benefited from the crisis but their later abnormal returns remained smaller than those of fossil-fuel and uranium peers.
Beyond short-term stock movements, the study emphasizes the international implications for energy security and market resilience. The results highlight that regions more dependent on Russian energy experienced weaker market responses, suggesting that diversification may enhance resilience to supply shocks. Linking their evidence to the COP26 pledge to “move away from coal and towards clean power”, the authors suggest that the conflict may strengthen the case for speeding up the energy transition. Additionally, the research shows that capital markets respond swiftly to supply chain disruptions, illustrating their role in reallocating capital in times of geopolitical uncertainty.
The war, its associated sanctions, and broader energy challenges have impacted global energy markets in ways that extend beyond immediate financial fluctuations. While fossil fuels remain central to short-term energy security, the increased investor interest in alternative energy sources suggests that the long-term direction of the global energy sector may be shifting toward diversification and resilience.
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