Global Risk Indexes (17-02-2025)

Global 98 (0 —)
MENA 99 ( —)
APAC 98 (+1 ▲)
Europe 98 ( —)
Africa 98 ( —)
AMERs 98 ( —)
Markets 98 (+1 ▲)
Graham Westcott, Global Markets region analyst at Worldwise Analytica

Graham Westcott

Navigating Global Intersections: Where Trade, Finance, Energy and Geopolitics Converge

Markets Face New Shocks: Trade Wars, Energy Realignments, and Financial Volatility Reshape Global Economy

As global markets struggle with economic fragmentation, the deepening U.S.-China trade war, geopolitical conflicts, and monetary policy shifts are driving financial instability. The rapid evolution of trade restrictions, energy market shifts, and global financial realignments is creating new risks and opportunities for investors.

Escalating Trade War: China Retaliates, Energy Markets Feel the Impact

The U.S.-China trade war has entered a new phase, with Beijing imposing tariffs of up to 15% on U.S. coal, LNG, and crude oil. This move is expected to severely disrupt U.S. energy exports to China, further exacerbating volatility in global commodity markets. Chinese steel manufacturers are scrambling to secure alternative metallurgical coal sources, turning to Australian and Canadian suppliers, which will likely push up global prices.

The shift in trade flows is reinforcing economic fragmentation, with traditional supply chains breaking down. As China diversifies its import sources, U.S. coal producers will be forced to seek alternative buyers in Japan, South Korea, and India, reshaping global trade relationships.

Libya’s Oil Crisis: The Rise of Private Oil Exports Creates New Risks

The growing power of armed factions in Libya’s energy sector is creating fresh instability. The emergence of Arkenu Oil, a company linked to the eastern Libyan faction led by Khalifa Haftar, marks the first time a private company has openly challenged the monopoly of the state-run National Oil Corporation. The move threatens to splinter Libya’s oil trade, with payments being funneled through banks in Dubai and Geneva rather than Libya’s central bank.

China and Russia are among the primary buyers of Libya’s oil, indicating a broader shift in global energy trade away from Western financial systems. The U.S. and EU are likely to respond with sanctions, but enforcement will remain difficult as payments are routed through offshore entities.

Financial Markets: Yen Strengthens, Gold Holds Near Record Highs

In currency markets, the yen surged after stronger-than-expected Japanese GDP data raised expectations of further rate hikes from the Bank of Japan. This shift is putting downward pressure on the U.S. dollar, which is struggling amid weaker-than-expected economic data and rising market speculation about future Federal Reserve rate cuts.

Gold remains near record highs as investors seek safe-haven assets amid increasing market turbulence. With trade war fears mounting and global inflation concerns persisting, central banks continue to add gold to their reserves.

U.S.-Russia Peace Talks: Market Implications

The announcement of U.S.-Russia negotiations on Ukraine, held without direct European or Ukrainian participation, has raised new uncertainties in financial markets. A potential deal could result in the relaxation of some Western sanctions on Russia, which would impact global commodity markets. Oil prices remain under pressure as investors weigh the possibility of increased Russian crude exports if sanctions are lifted.

However, European markets remain skeptical, with the euro strengthening slightly as investors assess the likelihood of a deal that could bring some economic stability to the region.

Looking Ahead: Economic Fragmentation Accelerates

As trade wars escalate and supply chains realign, businesses and investors must prepare for sustained economic fragmentation. The financial sector is adjusting to new trade and monetary policy realities, while energy markets remain highly volatile. Moving forward, economic uncertainty will continue to shape investment strategies, requiring flexibility and risk management to navigate the rapidly changing global landscape.

Geopolitical Risk Assessment for the Global Markets
(17-02-2025)

Global economic risks are intensifying as geopolitical conflicts, trade wars, and financial instability converge. The U.S.-China trade dispute is escalating, with Beijing’s retaliatory tariffs disrupting global energy and commodity markets. The Ukraine-Russia conflict has entered a new phase of diplomatic maneuvering, creating uncertainty in European markets. Meanwhile, the rise of private oil exports from Libya signals growing instability in global energy trade. Currency markets are responding to divergent monetary policies, with the yen strengthening amid expectations of Bank of Japan rate hikes. Market volatility remains high, with investors moving into safe-haven assets such as gold as global risks mount.

Geopolitical Risk Index

Developments to Follow for the Global Markets (See All Global)

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