The Impact of Geopolitical Factors on Global Oil Prices and Supply Chain Sustainability

Kadugala J.M Aniceto () and Florence Masai ()

International Journal of Supply Chain and Logistics, 2025, vol. 9, issue 4, 67 - 82

Abstract: Purpose: This paper assessed the effects of political stability and trade sanctions on SCSC; with references to the Russo-Ukraine war ordeal, Iranian SCSC under sanctions, and SCSC under the oil embargo. Trade restrictions, environmental policies and other regulatory factors have an impact on energy trade by increasing the volatility of the global energy market and the inefficiency of supply chains. Methodology: In this study, secondary source of data collection was employed by extracting information from government documents, journals specializing in oil industry and academic database to evaluate the economic and policy effects of changes in the oil market. Findings: It is found out that supply influences oil price fluctuations resulting from geopolitical crisis such as wars, trade policies and regulation initiatives, economic sanctions, piracy and terrorism, and political instability. Nonetheless, restrictions like embargoes significantly impact oil trade, hence adversely affecting supply chain operations and associated costs. Furthermore, environmental policies are altering the nature of supply chain resilience through carbon regulations, fluctuations in energy availability, and the imposition of emission capacity limitations that are disadvantageous for oil-dependent nations. Unique Contribution to Theory, Practice, and Policy: It was suggested that both the governments and the economies which rely heavily on oil put more relaxed measures in place in an attempt to counter the challenges of the oil supply chain fundamental to the environmental as well as the trade policies. That is why future research should investigate the problems of real-time monitoring of geopolitical risks and the impact of digitalization of the oil market on a more distant outlook.

Keywords: Geopolitical Risk; Oil Price; Energy Supply; Trade Sanctions; Energy Security (search for similar items in EconPapers)
Date: 2025
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