WORLD’S SUPPLY CHAIN DISRUPTION AND THE ENERGY CONFLICT BETWEEN RUSSIA AND UKRAINE

Abstract

This study applies a business cycle-based methodology to the energy sector to examine how the war between Ukraine and Russia affects vitality cycles. To evaluate the war's effects on energy cycles, we do regression analysis and analyze the impulse response function in generalized form using Russian economic policy. This article offers a way to look at intricate circumstances, including several aspects. The quantitative research approach is used for this article. Uncertainty variables are generated using data from Google searches as a measure of conflict. Our assessment shows significant variations in the price cycles of fossil and renewable energy. The cycle of prices for renewables is more persistent, suggesting a constrained reaction to the conflict shock. By comparison, the pricing cycle of fossil fuels demonstrates more notable and long-lasting fluctuations in regimes with elevated and depressed volatility. These results demonstrate the diverse effects of the war between Russia and Ukraine on the fossil energy market, suggesting possible interruptions to supply networks and heightened market sensitivity. Notably, under all market settings, fossil energy prices show a greater reactivity to the crisis between Russia and Ukraine.