Energy sanctions in the global economy: Geopolitical disruptions, market fragmentation, innovation and green transition

Economic sanctions have emerged as critical instruments of geopolitical strategy, with significant ramifications for global energy markets, innovation trajectories, and the transition to sustainable energy systems. This study offers a qualitative synthesis of literature and case studies spanning 2000–2025 to evaluate how sanctions affect major energy producers such as Russia, Iran, and Venezuela. The analysis reveals that sanctions disrupt energy supply chains, restrict access to foreign investment and advanced technologies, and constrain integration into global financial systems. Simultaneously, they trigger adaptive responses, including domestic innovation efforts, clandestine export practices, and new geopolitical alliances. A key finding is the paradox of sanctions in shaping energy transitions. While sender states, particularly in Europe, have accelerated renewable energy adoption to reduce their dependence on sanctioned fossil fuels, target states often experience technological stagnation and entrenched reliance on conventional hydrocarbons. Notably, sanctions have stimulated localized innovation in some contexts, such as Iran's refining technologies and Venezuela's shadow fleet logistics. The study also identifies gaps in current scholarship, especially regarding the long-term governance implications of sanctions, the emergence of parallel energy markets aligned with BRICS and OPEC+, and the uneven global distribution of green investments. By integrating political realism and social constructivism, the research highlights the dual character of sanctions as both coercive instruments and inadvertent catalysts of systemic energy change. These findings call for a more nuanced policy approach that balances geopolitical objectives with sustainable energy security. © 2025 Elsevier B.V., All rights reserved.