Impacts of a global energy crisis on supply chain performance, ripple effects, and viability

Abstract

We simulate impacts of a global energy crisis on supply chains (SCs). First, we articulate the specific features that frame a global energy crisis as a unique type of SC large-scale systemic shocks characterized by a long-term disruption existence, disruption propagations (i.e., the ripple effect), a combination of immediate and delayed effects, cross-industry ripple effects, and mutual interrelations of SC and economic impacts. Second, we demonstrate how simulation-based methodology can be used to examine and predict the impacts of global energy crises on SC performance using the example of the Strait of Hormuz blockage and anyLogistix software. The major observation from the simulation experiments is that global energy crisis impacts resemble the COVID-19 pandemic patterns and ripple effects in 2020–2022 with reduced logistics capacities, delivery delays, and production shutdowns, supplemented by inflation effects observed in tariff turbulences in 2025. Other important factors influencing the shock impacts and propagation mechanisms are the duration of the energy crisis and SC viability. We observe that viable SCs with greater variety in production, supply, logistics, and energy structures are better able to absorb shocks. The outcomes of this research can be used by decision-makers to predict the operational and long-term impacts of global energy crises on SCs and to develop viability strategies. Our models are readily available to be used in practice for SC stress testing. They offer recommendations on proactively building adaptability and reconfiguring in response to disruptions to survive in a world without a reliable energy supply, incorporating large-scale systemic shocks into operational models.