How the Russia-Ukraine war is forcing countries to rethink their energy strategies

March 9, 2022
Anna Rohrhofer
Yuchen Xia

Lots has happened since Russia invaded Ukraine on February 22. The stock market has been in turmoil with most investments going down and oil prices shooting up. As a result of many countries introducing sanctions on Russia, a global re-evaluation of the dependency on Russian oil and gas has emerged. But what are the consequences in the short and long term for energy investments? And who could potentially benefit from this situation in the long run?

The short-term reactions

As an almost immediate result of sanctions put on Russia, commodity and energy prices (as well as food prices, given that Russia and Ukraine are major food exporters) have risen dramatically and are likely to remain high. This led to a push in inflationary pressure and energy related stocks, including alternative energy stocks. In the short term, ESG concerns may have to give way to an increase in demand for traditional energy productions.

The long-term consequences

The sanctions on Russia are causing countries to rethink their dependency on the nation, specifically in terms of energy and commodity supply. This has led to many government officials, as well as  consumers, pushing toward structural changes in their supply chain management. Thus potentially benefitting clean energy companies over the long run.

Potential beneficiaries:

The potential benefactors of recent events are primarily companies focussed on renewable, alternative energy. Some noteworthy sectors and companies are:

  • Electric Vehicles: Nio, Tesla, Li Auto, XPENG, BMW, Lucid Motors, Hyliion
  • Solar power: Enphase Energy, Solaredge Technologies, Nur Energie, First Solar, Sunpower, Brookfield Renewable
  • Alternative energy: Renewable Energy Group, PlugPower, Nextera Energy, Xylem (water technology), Siemens, Ballard Power Systems

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