Preliminary study on the global impact of sanctions on fossil energy trade: Based on complex network theory

Abstract

Russia is the main supplier of fossil energy to European countries. The impact of sanctions on fossil energy trade under the background of the Russia-Ukraine conflict has attracted global attention. Based on the data on fossil energy trade in 2020, this study simulates the impact of sanctions on national trade and global fossil energy trade patterns based on complex network theory and cascading failure model. In terms of negative impact, the crude oil trade has the largest potential impact, the natural gas trade has the largest direct loss and the coal trade has the least impact. To mitigate the impact of sanctions, Russia may shift its fossil-energy export focus to China and other Asian countries. The positive impact analysis shows that crude oil is the main source of benefits for energy exporting countries and the United States will become the biggest beneficiary among energy exporting countries. In addition, the study found that sanctions reshaped the pattern of global fossil energy trade, improved the trade efficiency and energy anti-control ability of European countries, and promoted the transfer of energy control centres from Europe to Asia. It is of great significance to study the impact of sanctions on global fossil energy trade to deal with geopolitical shocks, formulate energy trade policies and manage energy risks.