Page 63 - CMA Journal (Mar-Apr 2026)

S ECT O R I NSIG HT S

Geopolitics, Energy Shocks & Asia's LNG Crisis:

Lessons for Pakistan & South Asia

By: ICMA Research and Publications Department

The global economic environment is going through a major Introduction
structural change. Commodity market volatility is no longer
driven mainly by supply and demand fundamentals. Instead, The movement of global commodity prices, particularly Brent
geopolitical tensions, supply chain disruptions and systemic crude, WTI crude and palm oil, clearly shows how global
risks are becoming the primary drivers. As a result, global energy and agricultural markets moved from a period of
commodity markets including energy, metals, fertilizers and gradual correction in 2025 to severe instability in early 2026.
agricultural inputs have become increasingly sensitive to This shift was driven mainly by geopolitical shocks, policy
geopolitical shocks. Price formation is now shaped more by uncertainty and systemic global risk rather than traditional
risk perception, transport insecurity and policy uncertainty supply and demand factors. The change is visible not only in
than by economic fundamentals. This represents a broader commodity prices but also in the synchronized movements of
shift towards a less stable global economic environment key uncertainty indicators. These include the Oil Price
where interconnected markets spread shocks rapidly across Uncertainty Index (OPU), World Policy Uncertainty Index
regions and asset classes. (WPUI) and Geopolitical Risk Index (GPR), all of which point to
a global economic system that is becoming increasingly
At the same time, nancial innovation including tokenization fragile and vulnerable to external shocks.
and digital market infrastructure is reshaping capital markets
by improving e ciency, transparency and liquidity. However, During 2025, global oil markets largely re ected a period of
commodity markets remain tied to physical supply chains, normal adjustment. Brent crude fell from 78.2 USD per barrel
making them more vulnerable to geopolitical disruptions. in January 2025 to 61.8 USD by December. WTI similarly
This widens the gap between nancial modernization and declined from 75.6 to 58.0 USD over the same period,
real sector exposure. Against this backdrop, ICMA emphasizes re ecting weak global demand, moderate consumption
that understanding these structural shifts is essential for growth and broadly balanced supply conditions. Palm oil
strengthening macroeconomic stability, energy security and prices also moved lower over the same period, falling from

policy resilience in developing economies such as Pakistan. In 1,030 USD in January 2025 to approximately 981 USD by year
such economies, external shocks directly translate into end, re ecting easing agricultural cost pressures and stable

in ationary pressure, scal stress and energy insecurity. supply conditions.
Table 1: Global Price of Brent Crude in USD per Barrel (Monthly)
Date Brent Crude Price WTI Crude Prices Price of Palm Oil
1/1/2025 78.2 75.6 1030
2/1/2025 75.2 71.5 1067
3/1/2025 71.7 68.2 1057
4/1/2025 66.9 63.6 981.2
5/1/2025 64.1 62.2 902.8
6/1/2025 69.8 68.5 934.5
7/1/2025 69.6 68.4 931
8/1/2025 67.2 64.9 1026
9/1/2025 67.6 64.0 1035
10/1/2025 64.0 60.9 1038
11/1/2025 63.7 60.0 977.1
12/1/2025 61.8 58.0 981.2
1/1/2026 64.6 59.9 1004
2/1/2026 69.4 64.4 1034
3/1/2026 99.4 91.4 1121
Source: Federal Reserve Bank of St. Lousi & Macrotrends

61 ICMA’s Chartered Management Accountant, Mar-Apr 2026

Figure 1: Global Prices of Brent Crude, WTI & Palm Oil- Monthly
(USD per Barrel)

120.0 1200.0
100.0 1000.0
80.0 800.0
60.0 600.0
40.0 400.0
20.0 200.0
0.0 0.0

Global Price of Brent Crude Global WTI Crude Prices Global Price of Palm Oil

However, despite this apparent stabiliza�on in commodity prices, major global uncertainty indicators
pointed to deepening systemic vulnerabili�es. The Oil Price Uncertainty Index rose sharply from 40.8 in
January 2025 to 90.2 in March, then surged to 186.7 in June, and reached 208 by December, indica�ng
persistent instability in market expecta�ons despite temporary price modera�on.