Global geopolitical risks versus region's energy transition and security policies
- EU sanctions and REPowerEU have fundamentally reconfigured Europe’s oil and gas supply structure, sharply reducing dependence on Russian energy
- Supplier diversification, mainly in crude oil, has improved energy security but increased Europe’s exposure to LNG markets and geopolitical developments beyond its territory
- The Iran war triggered a sharp rise in Brent and TTF prices, although oil-market oversupply, diversified crude sourcing and stock building in China helped limit the increase relative to 2022
- EU gas markets have proven more vulnerable than oil markets, with low storage levels, LNG competition and the planned phase-out of Russian gas sustaining high TTF prices
- The EU’s renewable energy transition will provide a growing buffer against energy shocks, but faster investment is needed to enhance energy security and reduce exposure to geopolitical risks
