Global evidence on the Russia–Ukraine conflict and energy stock returns

Using the event-study and difference-in-differences approaches, this paper examines the impact of the Russia–Ukraine conflict on the stock returns of alternative energy and oil & gas producers from 48 countries. We focus on multiple critical events from the beginning of the invasion through eight months into the conflict. Our empirical results indicate that renewable energy and oil & gas producers performed better than the general stock market. Oil & gas producers generated greater returns when compared with alternative energy firms, especially at the beginning of the conflict. The gap in stock returns between the two groups of energy producers shrank significantly as the conflict progressed. Particularly in Europe, later stages of the conflict witnessed greater alternative energy stock returns than oil & gas ones. A further examination of the index returns for the segment of well-established energy firms reveals that renewable indices performed better then oil & gas indices in every critical phase of the conflict. Finally, we show that the stock returns of renewable energy equipment manufacturers also exceeded those of oil & gas equipment producers during the crisis. Overall, our results indicate investors’ optimism about the prospect of green energy following the Russian invasion of Ukraine.