The high inflation peak seen as a short-term consequence of war is starting to subside, but there’s no sign the world will go back to zero inflation anytime soon. This is causing headaches for central banks that will need to keep tightening monetary policies. A global recession could foster debt crises, social discontent and political instability, particularly in emerging markets without welfare budgets to soften the shock of inflation and the increasing cost of living.

Oil has always been a geopolitical commodity. Now the same is happening with natural gas as the war in Ukraine continues. Russia’s attempt to weaponize natural gas exports and impact European support for Ukraine caused major shifts in European gas supply chains. With an unprecedented increase in LNG exports, which come at a higher price, countries like Norway, Qatar, Algeria, Nigeria and others have become geopolitically significant in facilitating Europe’s cutoff from Russian gas. As Europe secures supplies for the 2023-24 winter, South and Southeast Asian markets may struggle to compete, with the agriculture sector likely to suffer the most. High gas prices may keep fertilizer costs and food prices at historically high levels. This could result in energy shortages, food insecurity and social unrest.

Particularly in Europe, energy market fluctuations and the energy crunch due to the war in Ukraine are drivers of this unprecedented inflation. Oil and gas are still the most common forms of energy worldwide. In 2019, the International Energy Agency reported that more than 80 percent of the total global energy supply came from fossil fuels. Moving away from that will come at a cost, and different parts of the world have economic and strategic decisions to make. Competition for oil and gas resources, particularly between Europe and Asia, might price less wealthy countries out of the market and fuel animosity in the global south.

In the wrong hands, recent technological advances such as generative Al could inflict reputational and financial damage on oil and gas companies and cause broader political and economic instability. Generative Al allows users to easily create images and videos, even those who are not overly tech sawy. Generative Al is one of the forthcoming challenges in a growing trend of intentional misinformation. Cyber criminals continue to evolve and wreak havoc on businesses. Oil and gas companies have worldwide operations and a complex ecosystem of partners and suppliers – many with connected computer networks. If even one of these third parties experiences a cyber breach, it could put anyone in the network at risk. Oil and gas companies should adopt a “zero trust” strategy that enables adaptive protection and proactive risk management.

OPEC+ member countries have maintained similar oil production levels even as Europe moves away from sourcing Russian oil and gas. OPEC+ countries are not likely to increase production, as they prefer to protect a price floor of about US$90 per barrel for Brent crude (much higher than before the war in Ukraine). This decision could increase conflict between the US and its Gulf allies.