The global cascading impacts of oil shocks after geopolitical event based on a counterfactual simulation

Geopolitical events, such as the Russia–Ukraine conflict, accelerate global energy trade reallocation and supply chain restructuring. Oil shocks spread through global production networks via trade flows reorganization and production consumption. However, existing studies have not clearly described the process by which shocks generate initial disturbances through trade channels and undergo nonlinear transmission through production channels. This study constructs the MRIONFCS (multi-regional input-output network integrated with non-failure cascading spreading model) framework to simulate the dynamic transmission of oil shocks triggered by the trade reallocation of Russian oil through trade-production dual channels. By quantifying the economic impacts of shocks across 26 sectors in 189 economies, the study finds that the combined effects of trade centralization and geopolitical divergence exacerbate the uneven distribution of shocks. Asia (e.g., India, China) is the primary beneficiary of positive shocks, achieving cross-sectoral gains through industrial chain coupling. Europe (e.g., Germany, Italy) becomes a concentrated zone of negative shocks, with some regions experiencing persistent negative impacts due to refinery technologies locked into Russian Urals crude oil and slow energy transitions. At the same time, geographically critical small and medium-sized countries play counterintuitive roles in shock diffusion. Strategic hub countries such as Tunisia exhibit significantly higher amplification effects on shocks compared to large economies like India, acting as amplifiers for nonlinear shock transmission. This study reveals that the synergy between industrial structures and geopolitical strategies leads to resilience disparities among countries facing shocks, providing policy guidance for global energy-industry collaborative governance.