Energy security analysis in a geopolitically volatile world: A causal study

The study evaluates the causal nexus between geopolitical risk and energy security from 2004 to 2022. The results of the full sample causality indicate bidirectional causality between geopolitical risk and energy security. Moreover, the results suggest that geopolitical risk significantly impacts energy security in different sub-samples driven by the economic crisis, conflicts between nations, political instability, and terrorism, which have caused energy supply disruptions and increased energy insecurity. On the other hand, the result shows that energy security impacts geopolitical risk caused by economic instability and political unrest resulting from energy insecurity. Our model supports the results, demonstrating that geopolitical risk and energy security are closely intertwined and can have direct and indirect effects on each other. Energy security can be improved through energy diversification, investing in clean energy, building resilient energy infrastructure and promoting the peaceful resolution of conflicts.

Automated summary

This study examines the relationship between geopolitical risk and energy security from 2004 to 2022. The findings show bidirectional causality between geopolitical risk and energy security. Furthermore, the results indicate that geopolitical risk significantly impacts energy security in different sub-samples influenced by economic crisis, conflicts between nations, political instability, and terrorism, leading to energy supply disruptions and increased energy insecurity. On the other hand, the study also reveals that energy security affects geopolitical risk caused by economic instability and political unrest resulting from energy insecurity. The model demonstrates the close interconnection between geopolitical risk and energy security, with direct and indirect effects on each other. Enhancing energy security can be achieved through measures such as energy diversification, investment in clean energy, resilient energy infrastructure, and peaceful conflict resolution.