GVCs in times of global crises and economic regionalization: Case of Russian oil and gas industry

Abstract

The traditional global value chains (GVCs) model is changing, which challenges the strategic decisions of multinational enterprises (MNEs). Due to the increased uncertainty in the system of international economic relations, GVCs tend to shorten, and this is an additional risk for emerging markets MNEs in the context of adjusting their integration strategies into GVCs. Deglobalization and regionalization became a new global trend. States that cannot solve the problems of partial localization and control of chains vital to their economy are doomed to a new crisis in the foreseeable future. As the global economy returns to the indicators of 2019 for quite a long time, the processes of deglobalization, regional autarky, and national isolation will continue. For Russia and the Russian MNEs, the situation is aggravated by the presence of sanctions from the EU and the United States, as well as the difficult geopolitical situation around Ukraine. The unprecedented turbulence of global political and socio-economic processes in the current period creates significant risks for sustainable development. This study examines and discusses the influence of crisis such as the COVID-19 pandemic and the geopolitical crisis of 2022 on GVCs strategies in the cases of Russian vertically integrated oil and gas companies such as Gazprom, LUKOIL and Rosneft.