Agile Boardroom 4 - Geopolitics meets energy: What CFOs must factor into energy strategy

Geopolitics meets energy: What CFOs must factor into energy strategy

Energy strategy can no longer be separated from global events.

In 2026, geopolitical disruption is playing a growing role in shaping energy costs, reliability and business continuity. Conflict, trade restrictions, supply chain instability, shifting government policy and changing global demand are all influencing the Australian energy market.

For CFOs, this means energy is no longer simply a procurement issue or a line item on the P&L. It is a strategic risk category that can affect margins, cash flow, investment decisions and long-term resilience.

The businesses best positioned for the future are not necessarily those paying the lowest energy price today. They are the businesses that understand how global events could influence their energy position tomorrow.

Why Geopolitics Matters to Energy

Australia may generate much of its own electricity, but local energy markets are still closely connected to global conditions.

International events can influence:

• Fuel and electricity prices

• Gas availability

• Supply chain access for solar, batteries and electrical equipment

• Construction costs for new infrastructure

• The timing and availability of energy projects

For example, conflict in key fuel-producing regions can drive up global gas and oil prices. Trade disputes or shipping disruptions can delay the arrival of solar panels, transformers, batteries and other critical equipment. Political changes can also alter energy policy, incentives or carbon regulations.

As a result, energy costs and project timelines can change quickly, even when the disruption occurs on the other side of the world.

The Four Geopolitical Risks CFOs Need to Watch

1. Global Fuel Price Volatility

Australia may generate much of its own electricity, but local energy markets are still closely connected to global conditions.

International events can influence: fuel and electricity prices, gas availability, supply chain access for solar, batteries and electrical equipment, construction costs for new infrastructure and the timing and availability of energy projects

For example, conflict in key fuel-producing regions can drive up global gas and oil prices. Trade disputes or shipping disruptions can delay the arrival of solar panels, transformers, batteries and other critical equipment. Political changes can also alter energy policy, incentives or carbon regulations.

As a result, energy costs and project timelines can change quickly, even when the disruption occurs on the other side of the world.

2. Supply Chain Risk for Energy Projects

Many Australian businesses are investing in solar, battery storage, electrification and energy efficiency projects. However, much of the equipment required is sourced globally. Delays or shortages can be caused by:

• Trade restrictions

• Manufacturing disruptions

• Port congestion

• Increased freight costs

• Competition for limited supply

This means projects can take longer, cost more or fail to deliver the expected business case.

3. Policy and Regulatory Uncertainty

Government policy is increasingly having a greater effect on shaping the energy market. Changes to emissions policy, renewable incentives, grid investment, carbon pricing or industrial electrification can all influence business costs and opportunities.

At the same time, policies can change quickly following elections, budget decisions or international agreements. This creates uncertainty around; future energy prices, the viability of planned investments, carbon and reporting obligations and access to grants, incentives or financing

Businesses that monitor policy closely are better able to act early and avoid being caught by unexpected changes.

4. Reliability and Security of Supply

Geopolitical risk affects both price and reliability. Extreme weather, fuel shortages, cyberattacks, global conflict and supply chain disruption can all create pressure on the energy system. For organisations that rely on continuous operations, even a short interruption can have major consequences.

The most exposed businesses include:

• Manufacturing and industrial sites

• Cold storage and food processing

• Healthcare and aged care

• Data centres and technology businesses

• Large commercial operations

For these organisations, energy resilience is becoming just as important as cost control.

CFO Checklist

Is Your Energy Strategy Geopolitically Resilient?

• Financial Exposure

Have we modelled how global fuel or electricity price increases would affect the business?

• Do we understand the impact on margins, cash flow and working capital?

•  Are we too exposed to spot pricing or short-term contract rollovers?

• Have we considered the impact of currency movements on energy- related costs?

Supply Chain and Procurement Risk

• Are any critical energy projects dependent on imported equipment?

• Do we have alternative suppliers if delays occur?

• Have we allowed for longer lead times and potential cost escalation?

• Are we too reliant on one supplier, retailer or contractor?

Reliability and Continuity

• Do we know which sites are most vulnerable to energy disruption?

• Have we tested backup power and continuity plans?

• Could the business continue operating through a 24-hour outage?

• Have we included energy disruption in broader business continuity planning?

Strategic Readiness

• Is geopolitical risk included in our energy strategy?

• Is energy discussed at executive or board level?

• Are we balancing cost reduction with resilience and flexibility?

• Have we identified projects that could improve both energy security and cost certainty?

What This Means for Business Strategy

The traditional approach to energy often focused on securing the lowest contract price which is becoming less effective in a more uncertain environment. In 2026, the strongest energy strategies are based on balancing cost, resilience and flexibility.

This may include:

• Reviewing contracts earlier and more frequently

• Locking in a portion of energy costs to improve certainty

• Diversifying energy sources and suppliers

• Investing in on-site generation or storage

• Building greater flexibility into operations

• Stress-testing the business against different energy scenarios

The objective is not to predict exactly what will happen globally. It is to ensure the business is better prepared regardless of what happens.

Final Thoughts

Energy markets are no longer shaped only by local demand and supply. They are now becoming influenced by global events, political decisions and international supply chains. For CFOs and business leaders, the challenge is not to predict every geopolitical risk, but to ensure the organisation is prepared, flexible and resilient enough to respond.

In 2026, energy strategy is no longer just about securing the lowest price. It is about protecting the business from uncertainty, strengthening continuity and creating greater confidence in future decision-making.

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