Geopolitical Challenges and Natural Gas Supply

This study examines the impact of the Russia-Ukraine conflict, which began on February 24, 2022, on natural gas prices and supply security in major global markets. Six months after the conflict's onset, natural gas prices surged by an average of 78.65% across international markets. Notably, prices in the European Union, Russia, the United Kingdom, Japan, and South Korea saw substantial increases, while price hikes in China, the United States, and Australia were comparatively smaller. Despite these price fluctuations, the security of natural gas supply in key international markets remained largely unaffected. Using the Differences-in-Differences (DID) method, the study analyzed the conflict's impact on supply security, employing a mediation effects model to examine the roles of supply, demand, and price. The findings reveal that the conflict significantly reduced natural gas supply security, with negative effects on both supply and demand, although price changes did not mediate this reduction in supply security. Furthermore, the regional impact on supply security was minimal, likely due to the high integration of the global natural gas market. Overall, the Russia-Ukraine conflict notably influenced natural gas supply security by affecting supply and demand factors.