In terms of geopolitical security, there are clearly more hot spots than normal. Russia and China are increasingly exerting their influence on multiple fronts – from Europe, the Middle East and Southern Asia to the South China Sea and the Pacific. It could be just a temporary phenomenon. But it feels more like we are evolving from a “single hegemony” to a “multipolar” system where power is dispersed and the assumed rule of law gets challenged.
Energy security is both obvious and challenging. Electrifying the world and transitioning to cleaner fuels will create winners and losers and volatility. Geopolitics has made this harder. There will be impacts on sectors and countries that are high-energy users. The greatest risk confronting Europe’s outlook is that of significant energy rationing. Identifying trends, reducing risk and just where capital will flow will drive returns.