Rise of a Multipolar World
Recently, oil markets reacted sharply to the U.S.-Israel air campaign against Iran — “Operation Epic Fury” — and to Iran’s moves and threats affecting shipping through the Strait of Hormuz, a key route for global oil and liquified natural gas (LNG) flows.[1] Brent crude traded above $100 per barrel during the disruption and, according to Reuters’s reporting, reached intraday highs around $119 as the effective closure of the strait intensified supply fears.[2] This was not an isolated shock, but one flashpoint among many. From Russia’s invasion of Ukraine to the U.S.-China trade and technology standoff, geopolitical risk has intensified — fragmenting parts of the world economy and creating complex new perils for businesses. Companies are now grappling with this new reality. In a recent World Economic Forum survey of global leaders, 23% identified state-based conflict as the most likely driver of a major global crisis — ranking it above inflation and climate threats.[1] In short, geopolitical upheaval has become a core business issue.
For three decades, globalization promised stability and efficiency. Now that world is showing visible strain. Geopolitical fragmentation — the emergence of competing economic and political blocs — has become more pronounced. In practical terms, power is becoming more diffuse and regionalized, with influential actors such as the U.S., China, the European Union (EU), India, and Russia pursuing distinct agendas — sometimes cooperatively, but often at odds. For companies, this can mean navigating divergent rules and standards — what some strategists call a “multiplex world order” with overlapping spheres of influence. Business leaders increasingly need to monitor geopolitics as a routine input to strategy, not a once-a-year disclosure exercise.
Cascading Effects on Trade, Finance, and Technology
Geopolitical fragmentation does not confine itself to headlines — it cascades into almost every aspect of the business environment:
- Trade Policy and Blocs: The World Trade Organization (WTO)-led era of global trade liberalization has stalled. In its place, we see the rise of regional trade blocs and tit-for-tat protectionism. Countries are weaponizing trade policy — slapping on tariffs, export bans, and investment curbs to pursue strategic goals. This trend threatens to disrupt markets and force companies to manage multiple parallel trade regimes. For example, firms now may need to follow different standards or tariff rates when dealing in U.S.-led versus China-led spheres. Flexibility in supply chains and careful legal structuring of cross-border deals are crucial in this fractured trade landscape.
- Financial Systems and Sanctions: Global finance is also splintering under geopolitical strain. The sweeping financial sanctions on Russia — and Iran — have accelerated efforts by some nations to create alternative payment systems and even explore non-dollar trade. For multinational businesses, this could mean more currency volatility and added compliance. Already, banks face challenges screening transactions across an expanding list of sanctioned entities and dual-use export rules.
- Technology Controls and Digital Borders: High tech has become a geopolitical battleground. Nations are asserting “tech sovereignty” — including requirements for local data storage, restrictions on foreign technology in sensitive sectors, and tighter rules over cross-border data transfers. This fragmentation raises costs and can hinder collaboration. At the same time, fragmentation is spurring countries to foster domestic technology capacity. India is frequently cited as an example: policy debates on data localization and incentives for cloud and data center investment have encouraged global providers to expand local data center footprints.[3]
- Second-Order Economic Effects: Geopolitical turmoil has ripple effects on markets. One is resurgent inflation — for instance, the Hormuz crisis pushed fuel prices to their highest in over a decade. This has forced central banks to jack up interest rates, raising borrowing costs for businesses worldwide. In short, these second-order effects — from inflation spikes and interest-rate swings to new regulations — are now part of the strategic calculus for any prudent corporate leader.
Geopolitics Through a Forensic and Compliance Lens
Beyond the macro trends, geopolitical risk is translating into specific fraud, compliance, and legal challenges. In a more fragmented operating environment, control gaps and third-party risk can increase, particularly when companies change suppliers, enter new markets quickly, or face disrupted logistics. A few areas that commonly warrant heightened attention include:
- Fraud, Bribery, and Corruption: Historically, it is seen that in chaotic environments, opportunists thrive. When supply chains are disrupted or companies rush into unfamiliar but “safe” markets to replace sanctioned partners, internal controls can lag and bribery risks rise. The pressure to secure deals — or fast-track new suppliers — can tempt managers into cutting corners. The lesson is clear: Rigorous anti-corruption programs and third-party due diligence are more essential than ever. Shortcuts taken to “get things done” amid a crisis can quickly lead to legal nightmares. Strong internal controls and a culture of integrity are a must-have in these uncertain times.
- Sanctions Evasion and Illicit Trade: With sanctions now a prominent geopolitical tool, regulators and industry analysts have reported increased use of opaque ownership structures, intermediaries, and older vessels to move restricted commodities. One analysis estimated that such vessels may account for about 17% of the global oil tanker fleet. For legitimate businesses, the risk is not only direct violations — it is also indirect exposure via counterparties (partners, suppliers, brokers, freight forwarders, or end customers). For example, a manufacturer could unwittingly procure inputs that originated in a sanctioned jurisdiction via third parties, or a trader could charter a vessel with hidden ties to designated entities. The compliance burden has grown: Counterparties, beneficial ownership, routing, end-use/end-user, and dual-use controls may require deeper screening and contractual safeguards. Enforcement remains active, with significant penalties in multiple jurisdictions for sanctions breaches.
- Disputes and Legal Clashes: The new geopolitical tensions increasingly lead companies to court. Numerous Western investors are pursuing legal action or arbitration against Russia for seizures or forced sales of their stakes — a direct result of geopolitical breakdown. Separately, companies find themselves caught in legal crossfire: Consider the dilemma of a tech firm ordered by the U.S. to stop selling to China but simultaneously facing Chinese law that punishes compliance with foreign sanctions. In a fragmented era, firms should brace for more contract disputes, expropriation claims, and regulatory penalties tied to geopolitics. The best defense is proactive legal risk management — e.g. writing robust force majeure and sanctions clauses into contracts, keeping meticulous documentation, and monitoring legal changes in key markets. These steps can provide some protection because the alternative — fighting a legal battle after the fact — is far costlier and more uncertain.
- Cyber Warfare and Data Threats: Modern geopolitics often plays out in cyberspace — and businesses can be affected directly or indirectly. Government agencies in multiple jurisdictions have warned that state-linked and state-aligned actors may target critical infrastructure and private enterprises for espionage, disruption, or coercion. Where attribution is uncertain, it is safer to treat public reporting as indicative rather than definitive. In practice, organizations should assume elevated risk during periods of geopolitical tension and strengthen cybersecurity fundamentals (asset management, network segmentation, access controls, phishing-resistant multi-factor authentication (MFA)) and incident response plans, including executive decision-making and regulatory notification playbooks.
Actionable Strategies for Geopolitical Resilience
Faced with these challenges, what can board and executives actually do? It is not all doom and gloom — proactive companies can adapt and even find opportunity amid turmoil.
- Integrate Geopolitical Risk Intelligence: Businesses should establish a dedicated process — or team — for geopolitical risk intelligence to continuously monitor global developments and assess business impacts. This might include regular C-suite briefings on emerging threats, scenario analysis for plausible crises, and a country-by-country risk heat map for operations. Integrate these insights into decision-making. For example, if early-warning indicators suggest heightened instability or new sanctions in a country where you operate, you might delay a major investment, bolster local inventories, or line up alternate suppliers before disruption escalates.
- Fortify Compliance and Ethical Guardrails: In this environment, a robust compliance program is a competitive advantage, not a cost center. Audit your sanctions and export control compliance — is it keeping up with the rapid changes? Invest in anti-corruption and fraud controls, especially if you are moving into new regions. If you reorganized supply chains to include new vendors in unfamiliar countries, conduct thorough due diligence on them — including beneficial ownership, to spot any hidden government or sanctioned connections. Establish clear escalation protocols: For example, if a certain high-risk transaction or request comes in — say, an unusual payment route through a third country — who in management must sign off? Reinforce training so that employees worldwide understand the why, not just the what, of these rules — people on the ground are more likely to comply if they grasp how a lapse could shut down the whole business or land colleagues in jail. Importantly, set the tone at the top: Leadership should regularly communicate that ethical conduct and compliance are core to the company’s identity, especially amid external pressures. And lead by example: When top executives are willing to walk away from a lucrative deal because it raises ethical red flags, it sends a powerful message to the whole organization that values and compliance come first.
- Leverage Forensic Tools and Partnerships: Complexity calls for new tools and allies. One smart move is to cultivate relationships with external experts in investigations and risk. If something suspicious or concerning pops up — a whistleblower allegation of bribery in a foreign subsidiary, or odd network traffic that might indicate a cyber intrusion — having pre-vetted forensic consultants or legal advisors on speed dial can save precious time. Internally, consider using advanced analytics to detect risks early: For instance, use data mining on payment records to spot if any transactions are indirectly involving a sanctioned region; some compliance teams use AI to map corporate ownership and flag if “Company B” is ultimately owned in a high-risk country. In supply chain management, tools that track raw material provenance are becoming valuable to ensure, say, you are not inadvertently sourcing conflict minerals. Forensic data analysis is not just for after fraud occurs — it is increasingly for prevention and detection in real time. By combining internal vigilance with external support, companies create a safety net to catch issues before they escalate into full-blown crises.
- Strengthening Crisis Response and Resilience: In a volatile world, business resilience must be a core strategic pillar. Update and practice your crisis management and business continuity plans for geopolitical scenarios. Identify a cross-functional crisis team that can be activated quickly and has clear authority to make decisions. Run crisis simulations to test these plans. Also, review your insurance coverage — consider political risk insurance for assets in high-risk areas, and ensure your policies cover losses from events like political violence or cyber war. The companies that navigated recent crises best were those that expected disruption and knew what to do when it hit.
By taking steps like these, organizations can start to turn geopolitical anxiety into strategic preparedness. No company can control geopolitical events, but you can control how ready you are to react. The difference between a company that weathers a crisis and one that sinks often comes down to planning, speed, and a strong risk culture.
Looking Ahead: Prolonged Instability or Passing Storm?
A critical question lingers: Is this high-alert geopolitical environment the “new normal” for the long haul, or just a cyclical spike that will abate? While nobody has a crystal ball, many forecasters believe we have entered a prolonged era of instability.
Despite the daunting landscape, it is important to maintain perspective. Challenges also create opportunities. Companies that are quick to adapt can capture market share while others hesitate. For instance, some firms are pivoting their offerings to meet new needs — cybersecurity providers and risk consultancies are obviously in higher demand, but even insurers are innovating with products for political risk. Industrial firms in “safe” countries are seeing investment as manufacturers diversify production. Energy companies are finding new markets as nations seek secure supplies and transition to renewables faster for energy security reasons.
Editorial and Compliance Note
This article is general risk commentary only (not legal, sanctions, or investment advice); figures and attribution may change as events develop, so readers should validate sources and obtain jurisdiction-specific advice before acting.
References
© Copyright 2026. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC, its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
