Are energy markets getting polarized too?

Energy markets have long been shaped by geopolitics, policy decisions, and market forces. From the 1973 oil crisis to the rise of renewables driven by climate goals, shifts in these domains have redefined prices, incentives, and strategies.

Today, the outcome of the recent electoral super-cycle—spanning Australia, Canada, Germany, India, and the United States—threatens to polarize transatlantic energy dynamics further, creating a complex landscape that corporates must navigate.

With CERAWeek 2025 set to spotlight the geopolitics of energy and its implications for markets, governments, and corporates, these changes demand attention.

Transatlantic energy dynamics post-election cycle

United States: The US has traditionally prioritized energy security and independence. Despite President Trump’s push for energy dominance and conventional energy sources, efforts to dismantle decarbonization policies – like the Inflation Reduction Act (IRA) incentives and tailpipe emission standards – may falter as the industry continues to prioritize capital discipline and investor returns over expansion. Yet, the explosive growth of data centers is driving an unprecedented surge in electricity demand, pressuring all energy sources to scale up. American natural gas and LNG are increasingly critical, anchoring transatlantic cooperation and negotiations. Meanwhile, the IRA continues to fuel renewable investments, revealing a fractured policy landscape that balances fossil fuel priorities with clean energy. Leading EU equipment providers are assessing a further onshoring of their production footprint in light of potential new tariffs. 

European Union: The European Union faces the challenge of balancing its ambitious Green Deal goals of net zero and reduced energy dependency (60% imported energy) with competitiveness and security of supply. Today, the EU focus is much more on affordability in response to high energy prices that threaten economic stability, as manifested in the Clean Industrial Act presented in February. The European Commission under second-term President von der Leyen is expected to introduce measures targeting perceived unfair Chinese cleantech competition and making the continent’s single market more attractive for highly needed private capital from international investors – offering room for them to shape more favorable policy conditions.  

Germany as a traditional beacon of Europe’s economic strength finds itself at an unprecedented juncture after three consecutive years of recession. The presumptive new Chancellor Friedrich Merz and his Christian Democratic Union, the winners of snap elections held in February, are expected to put more emphasis on industry competitiveness and pragmatism for the German energy transition. Rather than adhering to specific targets and timelines, this means prioritizing secured capacity by granting permission for the construction of new gas-fired power plants. They are also expected to support alternative energy routes like CCUS, nuclear fusion or small modular reactors (SMRs.)

Canada: US tariff threats have disrupted Canada’s “business as usual” approach to its trade and political partnerships with lasting effects. At the same time, Canada's relationship with Europe politically has never been closer. The CETA free trade agreement –though not yet fully ratified– has already boosted trade and investment by 65%. A possible agreement on critical minerals and untapped shipping of LNG or hydrogen eastwards highlights the potential for the expansion of future cooperation with the European Union. Political change is certain too, with Prime Minister Justin Trudeau’s intention to resign on March 9 and national elections on the horizon.

How to recalibrate strategy and build new muscles

Risks and opportunities lie in close proximity with the transatlantic relationship entering potentially uncharted territory, including in the energy sector. Corporates must navigate this fast-changing multipolar world with a recalibration of strategies.

Here are three considerations to start with:

1. Expect the unexpected: Old playbooks are obsolete. Robust due diligence on shifting policies and regulatory impact, paired with alternative scenario planning, is crucial.

2. Future-proof your organization: Cross-border operations now carry heightened political and reputational stakes. Corporates must strengthen geopolitical analysis, public affairs, and strategic communication to bridge diverse regulations and priorities—think EU foreign direct investment processes or the global hydrogen race.

3. Fill the gap: With multilateral cooperation strained, global forums like CERAWeek, COP, and the World Economic Forum, among others, offer critical platforms for insight and opportunity. CERAWeek 2025, with its sharp focus on geopolitics, will be a pivotal arena for energy leaders to dissect these transatlantic shifts. It promises a space to unpack electoral impacts, navigate policy turbulence, and forge collaborative pathways across the Atlantic.

The transatlantic energy sector stands at a crossroads, polarized by electoral outcomes, policy uncertainties, and geopolitical currents. Corporates must anticipate change, bolster capabilities, and engage globally—starting with platforms like CERAWeek—to thrive. FGS Global offers the expertise to guide you through this multipolar maze, turning challenges into strategic wins. Contact us to chart your course in these dynamic times.