{"id":27621,"date":"2026-06-08T14:09:59","date_gmt":"2026-06-08T11:09:59","guid":{"rendered":"https:\/\/blogit.lab.fi\/labfocus\/?p=27621"},"modified":"2026-06-08T14:10:00","modified_gmt":"2026-06-08T11:10:00","slug":"how-nestle-kept-its-supply-chain-running-when-geopolitics-got-in-the-way","status":"publish","type":"post","link":"https:\/\/blogit.lab.fi\/labfocus\/en\/how-nestle-kept-its-supply-chain-running-when-geopolitics-got-in-the-way\/","title":{"rendered":"How Nestle Kept Its Supply Chain Running When Geopolitics Got in the Way"},"content":{"rendered":"\n

When Russia invaded Ukraine in February 2022, Finnish energy company Neste suddenly had a serious problem. About 70 percent of the crude oil processed at its refineries came from Russia, and overnight that supply route became politically and ethically impossible to maintain. What happened next is a useful example of how a large company can rebuild its supply chain in the middle of a crisis and why supply chain resilience has become such an important topic in international business today.<\/p>\n\n\n\n

\"[Alt
Image 1. A Neste tanker truck at a Neste Truck+ fuel station. Neste\u2019s downstream logistics and refining operations stretch across continents, which makes them sensitive to political shifts. (Parkkonen 2023)<\/figcaption><\/figure>\n\n\n\n

Why geopolitical risk matters for supply chains<\/h2>\n\n\n\n

Geopolitical risk refers to political events, such as sanctions, wars, and trade disputes, that disrupt normal economic relations between countries (Caldara & Iacoviello 2022). For a small open economy like Finland, where exports make up over 40 percent of GDP, these shocks land hard. Companies that once focused only on cost efficiency are now forced to think about something else. The ability to keep operating when the world becomes unpredictable is what researchers call supply chain resilience, meaning a company\u2019s capacity to absorb a disruption, respond to it, and recover without losing control of its operations (Ponomarov & Holcomb 2009). The Russia\u2013Ukraine war turned this concept from theory into reality for many Finnish companies like Neste.<\/a><\/a><\/p>\n\n\n\n

How Neste responded<\/h2>\n\n\n\n

Neste\u2019s reaction was fast. Within a few months, the company replaced almost all its Russian crude oil with supplies from the North Sea and other markets, cutting its Russian share from about 70 percent down to roughly 12 percent (Reuters 2022; European Council 2022). It also leaned on its biggest strength: the ability to use many different raw materials in its renewable fuel production. By adjusting its feedstock mix, Neste kept its refineries running while prices and supplies were jumping around.<\/p>\n\n\n\n

Behind these quick moves was a more structured system. Neste uses country risk assessments to flag unstable regions, screens its business partners against sanctions lists, and runs sustainability checks on its suppliers (Neste Corporation 2026). A closer look at the company\u2019s response to the 2022 disruption shows that these processes, together with long-term investment in renewable feedstock capacity, were what made such a rapid sourcing shift possible in practice (Alvee & Hassan 2026). These tools may not seem highly visible, but they are what allowed the company to act quickly rather than be paralysed by uncertainty.<\/p>\n\n\n\n

Part of what made this possible is the nature of Neste\u2019s raw material base itself. Unlike traditional oil refiners locked into crude oil, Neste processes a wide variety of inputs, including animal fat waste, used cooking oil, and other residues, sourced from dozens of countries (Alvee & Hassan 2026). This geographic spread meant the company already had multiple supplier relationships to draw on when the Russian supply route closed. The war did not just test Neste\u2019s ability to react; it revealed that years of investment in feedstock diversification had quietly built a buffer that pure cost-efficiency strategies would never have created. Importantly, the disruption did not end in 2022. By 2024, new pressures had emerged in the form of regulatory uncertainty, oversupply in renewable fuel markets, and operational challenges at refineries, all of which required the same kind of ongoing risk-management thinking rather than a one-time crisis response (Neste Corporation 2024). This suggests that geopolitical risk is best understood not as an occasional shock but as a permanent condition that demands continuous monitoring and adaptation.<\/a><\/a><\/p>\n\n\n\n

What this tells us about resilience<\/h2>\n\n\n\n

The Neste case shows that resilience is not just about reacting when something goes wrong. It is about having the supplier networks, flexibility, and risk processes already in place so that quick decisions are even possible (Alvee & Hassan 2026). Using digital monitoring tools, diversifying suppliers, and building strong partnerships are practical steps that any internationally operating company can take to improve resilience. The same logic applies whether the next disruption comes from a pandemic, a war, or a sudden change in trade policy: companies that have prepared in advance simply have more options when the pressure hits.<\/p>\n\n\n\n

For Finland, where so many jobs depend on global trade, the lesson is clear. Geopolitical risk is no longer a rare event to plan around occasionally. It has become part of the normal business environment, and the companies that take it seriously will be the ones still standing after the next shock.<\/p>\n\n\n\n

\n

Authors<\/p>\n\n\n\n

Ali Hassan<\/strong> is a Bachelor of Business Administration student in International Business at LAB University of Applied Sciences. He is interested in international trade, supply chain management, and how companies adapt to global change.<\/p>\n\n\n\n

Katrina Jaakkola<\/strong> works as a Supply Chain Management Senior Lecturer at LAB University of Applied Sciences.<\/a><\/p>\n<\/div><\/div>\n\n\n\n

References<\/strong><\/h2>\n\n\n\n

Alvee, A. & Hassan, A. 2026. The impact of geopolitical risk on international supply chain resilience: A case study of Neste. Bachelor\u2019s thesis. LAB University of Applied Sciences. Cited 22 May 2026. Available at https:\/\/urn.fi\/URN:NBN:fi:amk-2026052516415<\/a><\/p>\n\n\n\n

Caldara, D. & Iacoviello, M. 2022. Measuring geopolitical risk. American Economic Review 112(4), 1194\u20131225. Cited 9 Jan 2026. Available at https:\/\/doi.org\/10.1257\/aer.20191823<\/a><\/p>\n\n\n\n

European Council. 2022. How did the EU respond to the 2022 energy crisis. Cited 8 Apr 2026. Available at https:\/\/www.consilium.europa.eu\/en\/policies\/how-did-the-eu-respond-to-the-2022-energy-crisis\/<\/a><\/p>\n\n\n\n

Neste Corporation. 2026. Supply chain sustainability. Cited 8 Apr 2026. Available at https:\/\/www.neste.com\/sustainability\/supply-chain<\/a><\/p>\n\n\n\n

Parkkonen, T. 2023. A Neste tanker truck at a Neste Truck+ fuel station. Cited 28 May 2026. Available at https:\/\/brandhub.neste.com\/document\/80\/show\/eyJpZCI6NjEwNjEsInNjb3BlIjoiYXNzZXQ6dmlldyIsInRpbWVzdGFtcCI6IjE3Nzk5NjQyODEifQ:neste:Jo4c1EQaSgDv17sZGqO-eJ73tH8Vv98FqunWL3m7T-g<\/p>\n\n\n\n

Ponomarov, S. Y. & Holcomb, M. C. 2009. Understanding the concept of supply chain resilience. The International Journal of Logistics Management 20(1), 124\u2013143. Cited 21 Mar 2026. Available at https:\/\/doi.org\/10.1108\/09574090910954873<\/a><\/p>\n\n\n\n

Reuters. 2022. Finland\u2019s Neste boosted by strong refining margins. Cited 1 May 2026. Available at https:\/\/www.reuters.com\/business\/energy\/finlands-neste-boosted-by-strong-refining-margins-2022-07-28\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

When Russia invaded Ukraine in February 2022, Finnish energy company Neste suddenly had a serious problem. About 70 percent of the crude oil processed at its refineries came from Russia, and overnight that supply route became politically and ethically impossible to maintain. 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