13 1.4 ENERGY SHOCKS ARE RESHAPING INDUSTRY The Russia-Ukraine conflict demonstrated how energy shocks can reshape the geography of industry. Following the loss of Russian gas supplies, EU gas demand fell by approximately 20%, partly driven by a ~30% decline in output across energy-intensive industries from pre-conflict levels, as shown in Figure 5. Some energy-intensive production shifted toward regions with more competitive energy costs, illustrating how disruption can reallocate industrial activity as well as reduce demand. The discussion also highlighted the strategic value of refining and processing capacity. Access to crude or gas alone is insufficient if countries lack the infrastructure and flexibility to turn those resources into the fuels and industrial products their economies need. UNATTRIBUTED QUOTE “RISKS ARE MOVING. THEY DON’T SIT IN ONE PART OF THE VALUE CHAIN OR ONE PART OF THE SUPPLY CHAIN” FIGURE 5:EU gas demand profile and industrial activityxxiv Analysis by S&P Global Energy © 2026 S&P Global