New economic geographies of war: risks and disruptions in Eurasian transport routes and supply chains through the military conflict in Ukraine

1 Introduction

Europe’s economy is heavily dependent on international supply chain relations and corresponding security of trade routes. Yet the last years have laid bare the immense vulnerability of the many trade routes that Europe depends on, both land- and sea-based. Russia’s war on Ukraine came alongside substantial disruptions to strategic transport routes in the Black Sea. Since Russia's attack on Ukraine, Europe’s insecure oil and gas supplies, as well as the impacts of sanctions on the European economy (e.g. Crescenzi and Harman 2023; Prebilič and Jereb 2022), have dominated the public debate. While the most catastrophic scenarios have so far proven to be overexaggerated (see e.g. Bachmann et al. 2022), significant risks remain. In this paper, we aim to outline and discuss a less regarded but long-term challenge for European economies: the vulnerability of (land-based) supply chain routes and infrastructure between Europe and Asia, particularly China. We argue that the supply chains between Asia and Europe are not only vital for European and Asian consumer and industrial markets but had already been affected by risk and uncertainty long before the war in Ukraine. The attack on Ukraine worsened this already vulnerable situation and challenges related production networks and large-scale infrastructure programmes such as the Chinese Belt and Road Initiative (BRI; Mendez et al. 2022). Furthermore, the situation became even more tense in late 2023 and 2024, when (as a result of the Gaza-Israel conflict) Yemen Houthi rebels attacked multiple container ships and energy tankers in the Red Sea, creating maritime ‘chokepoints’ that pose a threat to global energy markets and increase freight rates (e.g. Aris 2023).

To make our case, we briefly outline on how war and military conflicts are discussed in economic geography and related international business literature, with a focus on trade routes and supply chains. We then look at Eurasian trade routes, particularly in the context of the war in Ukraine. We show that (nearly) all routes between Europe and Asia face serious risks, such as instability, contestation, authoritarian regimes, risk of rebel attacks and military conflicts. The implications of a continuous military conflict in Ukraine stretch beyond the immediate logistics corridor passing through Ukraine. Based on these findings we generally conclude that studies in economic geography and business literature on supply chain relations (e.g. studies on global production networks (GPNs) and global value chains (GPVs)) should more strongly consider conflict-related disruptions. This helps to understand current trade and supply chain dynamics, as well as the interdependency between different routes in the current times of crisis. The combination of vulnerabilities creates an uncertainty for European trade that has substantial implications for Europe’s endeavours to strive for strategic autonomy while continuing to be embedded in global trade.

In highlighting the long-term implications and challenges arising from wars, other violent conflicts and geopolitical tensions more generally, we develop an argument that ‘military’ geographies need to be integrated into work on global production and value chains in fields such as economic geography and international businesses. We even go a step further, suggesting that a specific consideration of the emergence of new ‘economic geographies of war’ is worthwhile in understanding not just GPNs but also in providing new insights for the complementarity of locations. On the one hand global supply chains are disrupted through local tensions. On the other hand geopolitical threats, violent conflicts, and of course wars lead to shifts in international businesses decisions in an effort to secure their long-run GPNs and GPVs. The war on Ukraine is one of these game-changing events at Europe’s eastern periphery. Making use of a map of key Eurasian corridors, we bring together some broader considerations for the shifts within GPNS on the (potential) shifts in GPNs and GPVs. These shifts influence businesses decisions, leading to the emergence of new variations of the economic geographies resulting from these military conflicts. We call these ‘economic geographies of war.’

The paper is structured as follows: The next section summarises the consequences of war and violent conflicts, drawing on, international businesses and military geographies highlighting a research gap in GPN and GPV research. In section three we map nine Eurasian trade routes, then discuss the potential consequences and bottlenecks for each corridor. In the fourth section we discuss the emergence of new economic geographies of war as a result of the Ukraine war and subsequent shifts in the BRI, before fifth coming to a conclusion.

2 Consequences of war and violent conflicts in economic geography and beyond

Beyond the loss of lives, different studies (e.g. Cowen 2014; Hu et al. 2023; Katsaliaki et al. 2021; Le Billon 2001) have already outlined the generally negative effects of war on trade. These factors are caused by a range of harmful factors, such as embargoes, damage to infrastructure, and loss of human capital. In violent conflicts, transport routes and infrastructure (such as airports, resource extraction sites, banking or power stations) are usually the most important and contested assets which conflict parties will fight for, interrupt or even destroy (to avoid them falling into the hands of opponents; see e.g. Le Billon 2001). Military conflicts can therefore lead to serious disruptions and decoupling processes, with severe consequences for global supply chains and trade.

Studies on global production networks (GPNs) or global value chains (GVCs), which are the dominant concepts in economic geography related to supply chains, have been widely silent about the effects of war and military conflicts on supply chains^[1] and only recently refocused on geopolitical risks (e.g. Follmann et al. 2024; Yeung 2023). Two further examples are first, Aoyama et al. (2024) who outline the development of diplomacy-driven governance as a result of the current shifts in global world order. Second, Hess and Horner (2024) highlight states strategies to navigate risks in geopolitically turbulent times, and the subsequent processes of coupling, decoupling and recoupling (see as well Pavlínek 2024). Both highlight growing concerns about military security for supply chains, yet the impacts of military wars on GPNs remain largely unstudied. A reason for this could be, that the debate on GPN and GVC has largely unfolded since the 1990s (e.g. Gereffi 1994; Gereffi et al. 2005; Henderson et al. 2002). This means it developed after the cold war, at a time when globalisation (with all its opportunities and problems) seemed unchained and rather free of geopolitical risks and military conflicts in the countries where most global trade took place. Missing widely empirical evidence and a tangible necessity to relate to, most GPN and GVC scholars therefore neglected studying or conceptualizing the impact of military conflicts and wars. Even recent studies on GVC and GPN dealing with risks, ruptures, frictions and decoupling do not discuss wars or military conflicts (for example De Marchi and Gereffi 2023; Völlers et al. 2023;^[2] Yeung 2015; Yeung and Coe 2015). This is still quite surprising as modern GPNs require reliable and – if “just-in-time” production and delivery is involved – rapid cargo movement (Maihold and Mühlhöfer 2021). A notable exception are Blažek and Lypianin (2024) show the Ukrainian state-owned companies reoriented after 2014 annexation of Crimea, but also showed that trade barely ceases entirely. Violent conflicts, or even just a high risk of conflict, can seriously challenge and disrupt these movements, however- Concerning geopolitical risks Yeung (2023) calls for more studies which incorporate and theorize the effects of powerful national and supranational actors and their related policies such as the US restrictions on technology exports to China or EU attempts of reshoring manufacturing to reduce import dependencies.

Indeed Follmann et al. (2024) outline that such geopolitics lead to a reconfiguration and recoupling of global supply chains; For example, when involved businesses are developing new strategies of near shoring or friend shoring in order to secure their long-run supply (see also Kalvelage and Tups 2024; Tups et al. 2024; Yang and Chan 2023).

Similar observations can also be made for parts of the international business literature. Here for example various studies location choices and innovation strategies of multinational enterprises (e.g. Cano-Kollmann et al. 2016; Lorenzen and Mudambi 2013; Wang 2022) view economic organizations and territories on different scales (e.g. multinational enterprises, clusters, urban agglomerations or countries) as connected networks, implicitly assume a context of easy flow of investments. While these works rightly outline the importance of international interrelationships and interdependencies for economic organisations and territories, they have to “some degree neglected the boundaries and frictions beyond the national level”; Bathelt et al. 2018; p. 1003). Those works analyzing such international frictions mainly focused on institutional differences such as diversity of languages, traditions, legal systems as well as related labor and business cultures (Bathelt et al. 2018; Berry et al. 2014), or recently on protectionist policies, pandemic related frictions (Bathelt and Li 2022; Lorenzen et al. 2020) but do not focus on the consequences of war and violent conflicts.

Literature on military geography can further enhance this understanding. Generally military geography deals with state military discourses of military power; a broad political geography, focused on the spatiality of armed conflict; and the political economies and sociocultural geographies of militarism (Rech et al. 2015; Woodward 2005). Bearce and Fisher (2002) outline and model explanations why and under which conditions desires for and related conflicts about resources, infrastructures and trade networks lead to war and other violent conflicts, but do not outline the effects of wars and other violent conflicts on international trade, supply chains and related infrastructures. Stewart and Fitzgerald (2001) for example analyse the consequences of a war within nations on their economic and social development. Mykhnenko (2020), analysed the effects on Russia’s first attacks on Ukraine in 2014 and focussed on the direct economic effects of the attacked country (depopulation, economic decline and erosion of development; see below). However, he did not take the perspective off international trade and supply chain effects and risks. Faye et al. (2004) in contrast outlined how wars and violent conflicts in one country can directly endanger or negatively affect a neighboring country, for example when transit countries suffer from violent conflicts, transit routes are damaged or closed, and this results in a rerouting of major trade or in the worst case, a stoppage of transit. Generally, less is known on the large variety of how military power shapes international economic relationships because of the various types of military power in which it can appear (e.g. threats, blockades, occupancy). Here, we can identify a general demand for further economic geographies of war which could link military geography closer with economic geography (in particular with work on global value chains and global production networks) and international business literature.

This could be further enhanced by literature on supply chain disruptions. Here, Katsaliaki et al. (2021) categorize war and other violent conflicts as low frequency but catastrophic macro level risks for supply chains. Similarly, Cowen’s (2014) work on logistics and transport route related disruptions along supply chains distinguishes between everyday delays (e.g. bad weather, failed engines, road closures) and deliberate interruptions in the context of violent and contested human relations. These include labour actions (e.g. strikes and blockades), piracy and border security checks, but also military actions. While some of these disruptions (in particular everyday delays) can at least partly be addressed and calculated within the risk and security management of supply chains, some of these activities are rather incalculable leading to insurable uncertainties and long-term disruptions.^[3] In the long run, violent conflicts and wars can therefore lead, not only to serious recalculations concerning increased costs for insurances, concessions and bribes, but also to disinvestment and disengagement from the affected businesses, regions and sectors (Le Billon 2001).

These different literature streams highlight the complexity of developments in regions affected by violent conflicts. In this paper we specifically focus on the Eastern borders of the European Union. Already, before the Russian attack in 2022, scholars were already discussing geopolitical and military risks along the Eurasian trade routes. A systematic literature overview with a particular focus on the Belt and Road routes between China, Europe and other large portions of Asia was undertaken by Hu et al. 2023. Here they defined risks of political stability, external conflicts and military interventions, among others. Hu et al. (2023) show that such risks are not only very significant but also increased from 2005 to 2020, with Afghanistan, Iraq, Russia and Ukraine as the main risk centres and military risks and destabilisation of national sovereign security as the dominant risk types. While many Middle Eastern countries have been threatened for decades by terrorism, ethnic conflicts and political instability, parts of Eastern Europe have again become a friction zone of political (e.g. NATO versus Russia) and military conflicts (e.g. Allison 2014; Russian Attacks on Ukraine 2014). Here Hu et al. (2023) outline a serious lack of awareness to these different risk types in academic literature on trade.

Russia’s attack on Ukraine has increased these risks dramatically. According to Mendez et al. (2022) the land infrastructure between Europe and Asia which passes through Ukraine and its direct neighbors has been affected by a reduction of investment, funding, and international cooperation due to the geopolitical shock. Further, the war negatively affected global value chains (Crescenzi and Harman 2023; Mendez et al. 2022; Nedopil 2022). These negative effects could be directly seen in price jumps in affected value chains such as food or cosmetics, which are highly dependent on Russian and Ukrainian seed oil (Crescenzi and Harman 2023). Li (2023a) further identified a reduction of trade and a general loss of trust from investors in the Belt and Road initiative along Ukraine and Russia but also along the BRI due to the risk of secondary sanctions against Russian allies such as China (see also Bo 2022). Figure 1 outlines the discussed consequences of war and military conflicts and the broader geopolitical insecurities for potential conflicts before we will outline and illustrate for Eurasian trade routes and supply chains in more detail.

Figure 1:

War and military conflicts, related risks and related effects on trade routes and supply chains (own compilation; see in particular Hu et al. 2023).

While the implications of war and military conflicts on trade are generally understood, we argue that in economic geography there is a lack of understanding of the vulnerabilities of different interdependent trade routes on the overall supply chain security of Europe. We thus re-emphasize the dependence of physical pathways and means of trade with geo-political actors. With this paper, we would like to invite more in-depth discussion on the specific situation concerning Eurasian trade routes and the concrete challenges. We aim to initiate this debate by first providing an overview of the key Eurasian infrastructure corridors and then summarising key challenges. These relate to global dependencies of areas with chokepoints as well as an increased dependency of the global trade networks on individual countries, or geopolitical sensitivities.

3 Mapping key transport routes and their general opportunities and risks

Overall, maritime routes continue to be the backbone of global trade, specifically trade between China and the EU. Dependence on sea-based trade routes was one of the first reasons for China to strengthen its land-based routes. Long before the Belt and Road Initiative was officially launched in 2013 by former Chinese president Xi Jinpeng, China was already putting considerable effort into building Eurasian train routes. Following the fall of the Iron Curtain, Chinese engagement helped to diversify the development of land-based trade routes from Europe to Asia (Sielker and Kaufmann 2020). To this day, however, the North Sea Harbours remain (in terms of volume) Europe’s most important link to global trade. The geopolitically tumultuous times, and specifically the rise of armed conflicts in Ukraine and in Gaza, have raised implications for supply chain and energy security. In Figure 2 we illustrate the major land- and sea-based infrastructure corridors between Europe and Asia, aiming to provide an overview of some challenges associated with each of these routes. Thereby, we show that a substantial and non-substitutable part of land-based trading activities are under serious threats. Many of these routes pass through Russia, through areas where Russia exercises de facto influence, or where it aims to increase its direct influence (Flanagan et al. 2020).

Figure 2:

Conflicts and limitations along the main routes between Europe and Asia (own design).

There are nine major infrastructure corridors and routes. The primarily land-based routes from Northernmost entry to Europe to Southernmost are: (1) the Cross-Russia Corridor, (2) the Baltic Crossing, (3) the Ukraine Land Crossing, (4) the Caucasus-Black Sea – Ukraine Crossing, (5) the Caucasus-Black Sea – Danube Crossing, and the (6) Turkey Crossing. The primarily maritime routes, following the entry points to Europe from North to South are: (7) The Arctic – North Sea Corridor (Northern BRI Sea Route), (8) the Suez Channel (Southern BRI Route), and (9) the Cape Route via South Africa, not displayed in Map 1. Many of these routes have been officially associated with the BRI.

In general, we use the terms “corridors” and “crossings” for broad routes, which themselves consist of smaller trade routes. We name the land-based entry points into the EU “crossings.” The Cross-Russia Corridor branches into different potential crossings before entering Europe. We derived these corridors based on the authors’ internal discussions and the BRI Corridors represented by New Silk Road mapping of MERICs and the TEN-T corridors of the European Union. The initial mapping were based on the MERICS tracking map from 2022, and considering updates till 2024 (MERICS 2024), and the TEN-T Corridors in the MFF period 2014–2020 and 2021–2027 (see for example, European Commission 2024). We then discussed these major transport routes in light of geopolitical tensions. The corridors presented here are, in the authors’ estimation, both key transport routes as well as those subject to substantial geopolitical tensions or regional sensitivities. Another key consideration here is whether alternative major funding routes exist in case of military interventions, rising violent conflict or geopolitical tensions, an aspect we consider important to understanding economies of war. We then illustrate in the example of Ukraine how these different routes may be interdependent and how geopolitical tensions affect the trading opportunities across different crossings. We also consider capacity limitations as an additional pressure weighing on businesses’ search for reliable trade routes.

In general, one can say that trade volumes on the various routes have significantly increased since 2011. For example, trade between China and Europe along the Kazakhstan, Russia, Belarus route increased from 100,500 containers TEU (Twenty Foot Equivalent Unit, the unit used to measure volume based on a standard container) in 2016 to 681,200 containers in 2022 (UTLC 2023). In total in 2022, land-route trade between Europe and China reached 1.6 million TEU (GTAI 2023). However, this number was strongly influenced by the COVID pandemic and related challenges for maritime traffic (see below). In our discussion we will not draw on exact trade numbers in these routes or subsequent economic implications. There are two reasons for this. First, overall trade flows are difficult to calculate due to varying sources, measurement methods, etc. Second, corridors are often a combination of a number of different logistic centres and microroutes, which are individually difficult to estimate. Our key argument is rooted instead in the major risks and challenges associated with these corridors, without aiming to estimate specific economic implications.

In general, the risks and challenges along these corridors include a halt in trade along one route due to sanctions or military conflicts, risks of additional conflicts, cost and time implications of using more ‘secure’ trade routes, capacity limitations, and increased dependency on a few countries through which transport routes run. Table 1 summarises prominent examples for risks and challenges along these corridors.

The trade bottlenecks between Europe and East Asia differ in route, but show some common patterns. In this section, we summarise these alongside the geopolitical insecurities of the different regions, first for the land-based routes and second for the maritime routes.

4 Geopolitical tensions and the emergence of new economic geographies of wars

The Ukraine war is an example of how military interventions, violent conflicts and geopolitical tensions more generally can lead to new economic geographies of war, where on the one hand global supply chains are disrupted through local tensions, as well as where international businesses in terms of their long-term outlook for GPN and supply chain security avoid specific trading routes as their default option. On the other hand, military conflicts and geopolitical tensions have direct implications on GPNs. In this chapter we exemplify these implications in relation to China’s Belt and Road Initiative.

5 Outlook – towards a new economic geography of war

Drawing on Hu et al. (2023), we summarised the military and geopolitical risks for nine transport corridors across Eurasia, as well as the implications of the Ukraine war for these corridors. By providing an overview of the risks alongside the nine key transport corridors from Asia to the EU, our paper re-emphasizes the importance of considering the limitations and vulnerability of physical trade routes and infrastructure. We contend that Europe’s dependency on relatively few global trade routes poses a long-term threat to the European economy and could lead to serious consequences such as supply and trade delays, interruptions, price increases, and higher inflation. We observe that the public – and parts of the scientific – debate on the implications of the Russian aggression for the wider economy falls short in acknowledging this long-term threat to the land-based trade routes between Asia and Europe. Many of the risks related to trade routes between Asia and Europe center around Russia’s unclear, contested role in Eastern Europe. Russia’s president Putin strives for some restatement of dominance and leadership after the fall of the USSR. While there are other adversaries, such as Iran, our analysis shows that the Russian conflicts in the region have now reached a scale that threatens Western European economies. The war on Ukraine among many other challenges exemplified by the Houthi attacks on global commerce, further dramatically increased these risks.

The war in Ukraine itself, as well as the broader geopolitical reactions to it, create tremendous uncertainty in global value chains and for the locating of international businesses. The shifts in BRI priorities and routes are some of the most significant of these geopolitical reactions. Newer work on global supply chains (in particular GVC and GPN literature, e.g. Völlers et al. 2023), has started to acknowledge risks and resilience to geopolitical confrontation and military conflicts. Yet, these need to be analysed in greater detail, and considered in theorisation. In particular, GPNs offer a good lens through which the newly emerging geographies of war can be analysed. At the same time, reviewing existing GPNs against the geopolitical risks associated with specific routes can help scholars understand international business decisions within a broader framework. Here, the risks both from power shifts through violent conflicts with potential loss of sovereignty, as well as capacity limitations, create short-term potential for shifting trade between routes in case of a military intervention. Considerations of geopolitical sensitivity in international businesses’ decisions reflect these risks.

Overall, our discussion of the geopolitical sensitivities of trade routes and corridors at Europe’s Eastern borders indicate that, in view of the current situation, there is a clear and very concrete need to augment current explanatory approaches to supply chains, both in economic geography and in international business literature, with considerations of these geopolitical risks and the risks of wars and violent conflicts. This is especially true for the current debate on risks and resilience in GVCs and GPNs. With our paper we propose the first concrete levels of analysis of related risks, and short-term and long-term frictions and disruptions occurring as a result of violent conflicts (see Figure 1). These range from power intervention related risks, such as embargos, economic risks, such as investment dependencies, to additional disruptions in terms of trade volumes, increased insurance costs, disinvestment or loss of control over infrastructures. These factors can serve as an entry point into a general academic debate on economic geographies of war.