Dynamic Linkages Between Geopolitical Risk, Energy Prices and Supply Chain Disruptions: An Empirical Investigation

Abstract

This descriptive research has attempted to explore the sound relation among Crude Oil Price (COP) fluctuations, Geopolitical Risk (GPR) and Global Supply Chain Pressure (GSCP) by examining 339 monthly data pertaining to the period of January 1998 to March 2026. Distress in GSC has been gauged using the GSCP Index while geopolitical acts and threats have been assessed using the GPR index and fluctuations in global crude oil prices have been measured using COP index. Data pertaining to GPR Index was collected from the Economic Policy Uncertainty database developed by Caldara and Iacoviello while COP data was retrieved from World Bank commodity price database and GSCP Index was obtained from the Federal Reserve Bank of New York. Stationarity of the data has been established and Regression Analysis was used to expose the relationship between GPR, GSCP and COP. The study has revealed that GPR exerts positive impact on GSCP, GPR acts exerts negative impact on COP, GPR threat exerts positive impact on COP and GSCP exerts positive impact on COP. This study contributes to the growing literature on GSCP by integrating GPR and COP dimensions into macro-supply chain analysis and offers important policy implications for managing global economic vulnerabilities in an increasingly uncertain geopolitical environment.