Rising political interventions in oil and gas markets

From deglobalisation to potential shortages, policymakers must be mindful of the law of unintended consequences

The COVID-19 pandemic led to more government intervention in energy markets in economies across the globe. Following the Russian invasion of Ukraine, state involvement—from sanctions to price caps—became even more intensive, upending global oil and gas flows, and not necessarily in ways desired or intended. Getting the right policy balance is at the heart of good energy policy. Examples of ‘bad’ government intervention are efforts to influence energy prices, often leading to adverse impacts. Attempts to cap prices fall into this category. Legislating limits to energy prices only leads to reduced incentive to provide more energy and encourages waste. Aggressive price freezes and caps can lead