The Relationship between Geopolitical Events and the Crude Oil Prices: An Application of ARDL Model

Authors

  • Saleh Mothana Obadi Institute of Economic Research, Slovak Academy of Sciences, Šancová č. 5681105 Bratislava, Slovakia
  • Matej Korcek Institute of Economic Research, Slovak Academy of Sciences, Šancová č. 5681105 Bratislava, Slovakia

DOI:

https://doi.org/10.32479/ijeep.16487

Keywords:

Geopolitical Factors, Oil Prices, ARDL Model, Oil Supply and Demand, Cointegration

Abstract

This paper aims to explore the short-run and long-run relationship between geopolitical events and crude oil prices for the period 2000-2023. In addition to geopolitical events, we included the market factors whose data were available in the right part of the equation. To investigate long-run cointegration, this paper used quarterly data and employed the Autoregressive distributed lagged (ARDL) bounds testing approach developed by (Pesaran et al., 2001). Study findings from the ARDL bound testing approach confirm the existence of a long-run and short-run association between geopolitical events and crude oil prices. Furthermore, the findings from the ARDL model revealed that, among others, world crude oil production; OECD’s crude oil stocks, and OECD economic growth have a significant effect on the dependent variable (crude oil prices) both in the long run and short run.

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Published

2024-09-07

How to Cite

Obadi, S. M., & Korcek, M. (2024). The Relationship between Geopolitical Events and the Crude Oil Prices: An Application of ARDL Model. International Journal of Energy Economics and Policy, 14(5), 85–97. https://doi.org/10.32479/ijeep.16487

Issue

Vol. 14 No. 5 (2024)

Section

Articles

License

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