The impact of economic sanctions on traditional and renewable energy interests of target countries: Insights from a global outlook 2002–2022

Abstract

The conflict over energy resources between established and emerging powers has intensified during the third energy transition. As economic sanctions proliferate globally, they introduce external uncertainties that continue to reshape the global energy landscape. A notable example is the series of sanctions levied against Russia by the United States and the European Union during the Russo-Ukrainian War have generated significant challenges and risks, sparking extensive academic debate. This study analyzes the effect of these sanctions on the traditional and renewable energy interests of targeted nations using panel data from 2002 to 2022 across 66 countries. The findings indicate that economic sanctions adversely affect the energy interests of these countries, disproportionately impacting traditional energy sources more than renewable ones. Economic freedom, technological advancement, and governance capacity are crucial in offsetting the negative effects of economic sanctions on energy interests. In particular, economic freedom and governance capacity have a more significant impact on traditional energy, while technological advancement plays a more substantial role in mitigating effects on renewable energy. Over time, the negative impact of economic sanctions on the energy interests of targeted countries has increased. Specifically, developing nations under economic sanctions face significant challenges, whereas, paradoxically, developed nations may bolster their energy interests under similar conditions. This study aims to provide theoretical insights and strategies to protect the energy interests and promote energy equity among affected countries.