War and trade: Impact of geopolitical conflicts on global economic power dynamics

The intricate international trade network is deeply influenced by geopolitical factors and ongoing armed conflicts, serving as one of the most critical determinants in the formation of commercial dynamics.

- DR ANKITA SHARMA & DR APOORVA SINGH KATIYAR

The intersection of geopolitical tensions and economic relations has caught greater attention in recent years, especially when such armed conflicts interrupt global trade, change supply chain configurations, and bring significant changes in global economic power structures.

Interruptions in trade due to armed conflicts manifest direct interruptions of commercial routes, leading to costs and delays in transportation. The ongoing conflict of Russia-Ukraine exemplifies this phenomenon, as it resulted in serious interruptions in the main supply routes, especially in Europe. The Black Sea, a crucial maritime corridor for global grain exports, became a focal point of military activity, dramatically affecting commodity markets and leading to fired prices.

Moreover, armed conflicts may lead to sanctions, embargoes, and commercial restrictions, which further complicate international business relations. When nations impose economic sanctions on conflict participants, they usually evoke a double effect: the directed state experiences isolation, while those states that apply sanctions may also face unintentional economic repercussions. For example, the sanctions imposed on Iran have not only limited their oil exports but also influenced global oil prices, affecting economies worldwide.