Contracts in Crisis: The War in Ukraine and Long-Term Contracts in Energy Markets

Mats Kröger, Karsten Neuhoff and Sebastian Schwenen

No 2118, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: We examine the impact of the war in Ukraine on long-term contracts in energy markets. We find that traded contract volumes fall by 65 percent in the first months of the war. A collapse in bilateral trading contributes most to this decline. To protect themselves from price shocks, firms increasingly turned to long-term contracts already before the war. In sum, our results show that the market continued to serve firms’ hedging needs during the crisis, but bilateral trading networks collapsed, and liquidity was largely provided by centralized markets.

Keywords: Firm behavior; long-term contracts; forward markets; crisis; electricity (search for similar items in EconPapers)
JEL-codes: D22 G14 P48 (search for similar items in EconPapers)
Pages: 30 p.
Date: 2025
New Economics Papers: this item is included in nep-cta
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.diw.de/documents/publikationen/73/diw_01.c.948724.de/dp2118.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp2118

Access Statistics for this paper

More papers in Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().