Military alliances, geopolitical risks, and international energy trade

Energy is a fundamental input for economic activity, and stable partnerships with trading nations are crucial for energy supply and economic stability. This study explores the effects of military alliances and geopolitical risks on the trade of multiple energy resources across 42 major countries. Employing a gravity model, we find that military alliances promote the trade of refined oil, coal, gaseous natural gas, and enriched uranium. Geopolitical risks in both importing and exporting countries reduce the trade of refined oil and coal. However, heightened risks in importing countries increase the trade of gaseous natural gas and enriched uranium, whereas risks in exporting countries raise the trade of natural uranium. These findings suggest heterogeneous and resource-specific effects of geopolitical risks on international energy trade.