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by Josh Delfosse
Josh Delfosse

6 min read

Three Energy Market Trends To Watch In 2024: Geopolitical Risks, Global Economic Uncertainty And The Transition To A Greener Future

January 31, 2024

Josh Delfosse
by Josh Delfosse


The energy market has been a whipsaw in recent years, with each peak and valley shaped by unique forces. From the unforeseen disruptions of the COVID-19 pandemic in 2020 to the recovery in 2021, the surge in prices due to geopolitical tensions in 2022, and the global economic slowdown driven by inflation in 2023, the landscape has been ever-changing. As we step into 2024, it's crucial to identify the key factors that will influence energy costs. Three major energy market trends are poised to have a profound impact: increased geopolitical risks, global economic recovery, and a continued push toward carbon neutrality through sustainability efforts.

Geopolitical Risks: A Constant Source of Volatility

Geopolitical tensions have consistently played a significant role in shaping the energy market, and 2024 is no exception. Conflicts like the Russia-Ukraine war, disputes between Venezuela and Guyana, troubles at the U.S.-Mexico border, and ongoing conflicts in the Middle East are at the forefront. Additionally, the impact of COP28 and the delicate balancing act of OPEC+ contribute to the geopolitical complexities that keep the energy market on its toes.

Notably, disruptions in global supply chains have also been a recent concern. The Panama Canal and the Suez Canal, two critical trade corridors, have faced disruptions since the beginning of the year. Restrictions at these chokepoints have the potential to force governments and companies to reevaluate trade routes established over decades. Ongoing wars in Ukraine and the Middle East further threaten global supply chains, affecting not only energy commodities but food commodities like grain as well. Geopolitical tensions are thus making international supply chains more intricate, leading to continued volatility in the global energy market.

Pivotal global elections add another layer of uncertainty, influencing energy policies. Elections can pave the way for the adoption of new trade agreements or restrictions, providing motivation for businesses to be agile. The impact on business energy costs can be profound, whether the result is longer, more energy-intensive supply chains or growth in incentives. With approximately 64 countries and the European Union expected to hold national elections, the outcomes could catalyze significant advancements in how energy resources are managed and utilized globally.

50% of the World’s Population Will Have Their Elections in 2024

Three Energy Market Trends To Watch In 2024: Geopolitical Risks, Global Economic Uncertainty And The Transition To A Greener Future

Global Economic Recovery: A Catalyst for Energy Demand

Current global economic conditions remain subdued, but some market observers believe in the possibility of a global recovery or, at least, key economies avoiding a downturn. The latest International Monetary Fund (IMF) World Economic Outlook projects a soft landing, with global growth rates projected at 3.1%, similar to previous years. This is seen as an upgrade from previous expectations, indicating a more positive economic outlook. If global growth gains firmer footing, an increase in energy demand is likely, driven by higher production in industries and improved consumer spending confidence. However, this energy market trend comes with a caveat – the concern that rising demand could lead to higher energy prices, reigniting inflationary pressures that many economies are working to suppress.

Despite a hint of optimism from the IMF, the majority of global economic prospects remain subdued and uncertain, as indicated by a recent survey of chief economists. Among them, 56% expect the global economy to weaken in the next year, 20% foresee unchanged conditions, and nearly 25% anticipate stronger conditions. These divided results underscore the ongoing ambiguity that has characterized the outlook over the past year, continuing to cloud near-term economic developments.

Considering these dynamics, our Breakthrough freight demand indicator currently signals a year-over-year growth trend in Q2 2024. However, the significant portion of this growth is expected to materialize in the latter half of the year.

Sustainability Takes Center Stage: Transitioning to a Greener Future

The third major trend in 2024 revolves around the energy market's ongoing transition towards sustainability. The global push for emissions reduction has gained momentum, with various countries implementing policies and regulations to integrate renewable energy sources across industries. In the United States, where the transportation sector constitutes a significant 28% of greenhouse gas emissions, the demand for transformative change is undeniable. Initiatives such as carbon tax increases in Canada, the EU ETS in maritime shipping, and regulatory efforts like California's Advanced Clean Trucks regulation and New York's Cap-and-Invest program highlight the commitment to a more sustainable future.

To help transportation leaders navigate the complex sustainability landscape, Breakthrough has a dedicated team of sustainability experts that precisely calculate scope 1 & 3 transportation emissions and identify sustainable transportation partners to help shippers meet their sustainability goals.

When comparing the percentage of miles moved by SmartWay carrier rank from October 2022 to October 2023, we observed a 9% increase in miles moved by shippers with SmartWay carrier rank 2 carriers year over year. On the other hand, shippers transported 3% fewer miles with SmartWay carrier rank 1 carriers. These findings suggest a growing preference for more fuel-efficient carriers.

Three Energy Market Trends To Watch In 2024: Geopolitical Risks, Global Economic Uncertainty And The Transition To A Greener Future

By bringing together transportation energy management, policies and regulations, and incentives to adopt renewable energy sources, transportation leaders can be part of a pivotal moment in shaping a greener future.

Navigate 2024 Energy Market Trends with Ease

In summary, 2024 promises to be a year of dynamic changes in the energy sector. Geopolitical risks, economic recovery, and sustainability efforts are set to shape the industry's landscape. To successfully navigate these energy market trends, agility and adaptability are crucial. Transportation leaders must strive to balance the demands of a volatile geopolitical climate, economic uncertainty, and the push for a sustainable future. As we progress through the year, monitoring these three trends will be key for anticipating and responding to the evolving energy market dynamics.

Breakthrough offers unparalleled market insights that can equip your company with the knowledge to navigate these transforming times. Empower your strategy with our data-driven insights and expert analysis—subscribe to our blog today!

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