Global Risk Indexes (27-02-2025)

Global 98 (0 —)
MENA 99 ( —)
APAC 98 ( —)
Europe 99 ( —)
Africa 97 ( —)
AMERs 98 ( —)
Markets 99 ( —)
Graham Westcott, Global Markets region analyst at Worldwise Analytica

Graham Westcott

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

Global Economic Order Fragments: U.S.-China Conflict, Energy Market Shocks, and Financial Volatility Reshape Trade and Investment Flows

The world economy is undergoing a structural transformation as geopolitical tensions reshape trade, finance, and energy security. The intensification of U.S.-China hostilities, combined with sanctions-driven energy market disruptions and growing financial instability, signals that economic fragmentation is accelerating.

U.S.-China Conflict Expands: The New Reality of Economic Decoupling

The Trump administration has expanded its trade and technology restrictions on China, blocking Chinese access to advanced semiconductors and AI-driven defense technologies. In retaliation, Beijing has imposed new export controls on key minerals, including rare earth elements and lithium, directly impacting Western technology and defense industries.

Simultaneously, the geopolitical situation in the Indo-Pacific is escalating. The U.S. has deployed additional missile defense systems in the Philippines following China’s aggressive naval maneuvers in the South China Sea. Meanwhile, China has strengthened its economic and military ties with Russia and North Korea, signaling a realignment of global power blocs.

These developments are forcing global corporations to accelerate supply chain diversification. Major Western firms are shifting production to Southeast Asia and India, while Chinese companies are expanding operations in Africa and Latin America to bypass U.S. and EU trade restrictions.

Energy Market Turmoil: Middle East Sanctions and Eastern European Disruptions

The global energy sector is facing renewed volatility. The latest U.S. and EU sanctions on Russian and Iranian energy exports have triggered sharp reactions in oil markets. Brent crude has surged above $87 per barrel, as supply chain disruptions deepen.

Meanwhile, Eastern Europe’s energy infrastructure remains under threat. Ukrainian drone strikes have damaged key Russian oil transit routes through Belarus, limiting crude flows into the European market. This has forced the EU to increase emergency purchases from alternative suppliers, including North Africa and the U.S.

Adding to the turmoil, Saudi Arabia has signaled potential production cuts to counter falling oil revenues, further exacerbating supply pressures. The tightening energy market is raising inflation concerns, particularly in Europe and emerging markets.

Financial Markets in Crisis: Investors Flee to Gold and U.S. Treasuries

Global financial markets are reacting sharply to heightened geopolitical and economic uncertainty. Gold has hit an all-time high of $3,250 per ounce, as investors seek protection against inflation and currency volatility.

Bond markets are also under pressure, with widening yield spreads signaling investor anxiety. The U.S. dollar is strengthening as capital flows shift toward safe-haven assets, putting pressure on emerging market currencies. The Indian rupee and South Korean won have depreciated significantly, reflecting growing concerns over trade disruptions and financial instability.

Looking Ahead: The World Economy in a State of Permanent Realignment

The global economic system is no longer driven by open-market principles but by national security interests. Trade policies, energy strategies, and financial markets are being shaped by geopolitical rivalries rather than efficiency or cost competitiveness.

For businesses, investors, and policymakers, the ability to navigate geopolitical risks, diversify supply chains, and hedge against financial market volatility will be critical in the months ahead. Economic fragmentation is no longer a short-term phenomenon—it is the new global reality.

Geopolitical Risk Assessment for the Global Markets
(27-02-2025)

The global economy is experiencing its most severe fragmentation in decades as geopolitical tensions drive deeper trade barriers, energy insecurity, and financial instability. The U.S.-China conflict is now fully entrenched across multiple fronts—technology, trade, and military posturing—forcing global corporations to accelerate supply chain realignments. Simultaneously, the Middle East and Eastern Europe are seeing heightened instability, with oil markets reacting to new energy sanctions and military disruptions. Financial markets are under growing stress, with gold soaring, bond yields widening, and emerging market currencies facing sharp depreciation. The trend toward economic nationalism and protectionist policies is no longer cyclical but structural, setting the stage for prolonged uncertainty in global trade and finance.

Geopolitical Risk Index

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

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