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Geopolitical Shocks And Commodity Market Dynamics: New Evidence From The Russian-Ukraine Conflict

Author

Listed:
  • Joshua Aizenman
  • Robert Lindahl
  • David Stenvall
  • Gazi Salah Uddin

Abstract

We investigate the event-based geopolitical shocks from the Russian invasion of Ukraine on agricultural and energy commodities using daily event-based structural vector autoregression (SVAR). We find that the geopolitical shock affects the markets of wheat (2%), corn (1%) and European natural gas (7.5%). However, substantial heterogeneity is observed among the agricultural and energy markets. Geopolitical risk stemming from the Russia-Ukraine conflict affects the European natural gas market more strongly than the US and Asian markets. The regional segment of natural gas markets could explain this. Finally, our analysis explores how geopolitical news affects the dynamics of stock, currency, and bond markets.

Suggested Citation

  • Joshua Aizenman & Robert Lindahl & David Stenvall & Gazi Salah Uddin, 2023. "Geopolitical Shocks And Commodity Market Dynamics: New Evidence From The Russian-Ukraine Conflict," NBER Working Papers 31950, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31950
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    Cited by:

    1. Aleksejs Vesjolijs & Yulia Stukalina & Olga Zervina, 2025. "Assessment of Socio-Economic Impacts of Hyperloop Technology on European Trade Routes," Economies, MDPI, vol. 13(3), pages 1-21, March.
    2. Xie, Qichang & Bi, Yanhao & Xi, Yiyu & Xu, Xin, 2025. "The impact of geopolitical risk on higher-order moment risk spillovers in global energy markets," Energy Economics, Elsevier, vol. 144(C).
    3. Balash, V. & Faizliev, A., 2025. "Volatility spillovers in the Russian stock market: Responses to exogenous shocks," Journal of the New Economic Association, New Economic Association, vol. 67(2), pages 65-84.
    4. Wang, Anqi & Ding, Shusheng & Cui, Tianxiang, 2025. "Green bond market stability and Russia Ukraine conflict: The role of green inclusive finance," Research in International Business and Finance, Elsevier, vol. 74(C).
    5. Hao, Xinlei & Ma, Yong & Pan, Dongtao, 2024. "Geopolitical risk and the predictability of spillovers between exchange, commodity and stock markets," Journal of Multinational Financial Management, Elsevier, vol. 73(C).
    6. Hoffmann, Vincent & Huynh, Luu Duc Toan & Wang, Mei, 2025. "What drives abnormal returns of stock markets in wartime? Evidence from 17 invasions," European Journal of Political Economy, Elsevier, vol. 86(C).
    7. Keshav, Vaibhav & Vaidya, Meghana, 2025. "Geopolitical spillover: The Russia–Ukraine invasion and its effects on money market funds," European Journal of Political Economy, Elsevier, vol. 89(C).
    8. Ernawati & Syarif, Muhammad & Asri, Mansyur, . "The Impact of Governance and Digital Competitiveness on Agriculture Sectors Amid Global Uncertainty," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 17(2).
    9. Živkov, Dejan & Lončar, Sanja & Đurašković, Jasmina & Balaban, Suzana, 2025. "How do non-normal parametric VaR models perform in risk-minimizing portfolios?," The Quarterly Review of Economics and Finance, Elsevier, vol. 102(C).

    More about this item

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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