Oil price jumps and the uncertainty of oil supplies in a geopolitical perspective: The role of OPEC’s spare capacity

Selmi, Refk; Bouoiyour, Jamal; Miftah, Amal

doi:10.1016/j.inteco.2020.06.004

Cited by 16 publications

(15 citation statements)

References 29 publications

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“…Throughout the rest of our analysis and following Selmi et al . (2020), we try to determine the common determining factor which we interpret as the geopolitical risk composite index (GRCI).…”

Section: Methodology and Data Descriptionmentioning

confidence: 99%

“…All the aforementioned studies deeply suggest that GPRs exert a significant influence on stock returns and volatility, which seems quite intuitive. However, as far as the effect of GPRs on the GCC stock dynamics is concerned, the literature that emphasizes the importance of geopolitics in analyzing oil price dynamics is very scarce (for instance, Selmi and Bouoiyour, 2020; Alqahtani et al , 2020; Selmi et al ., 2020). Selmi and Bouoiyour (2020) claim that geopolitical events (in particular, the recent Saudi Arabia–Qatar diplomatic crisis) have an outsized impact on the GCC stock market performance.…”

Section: Introductionmentioning

confidence: 99%

“…Alqahtani et al (2020) find that global and Saudi GPR indices show weak evidence of predictability for excess stock returns in the region. Selmi et al . (2020) show that an increase in the GPR index is significantly associated with unanticipated oil price changes (i.e.…”

Section: Introductionmentioning

confidence: 99%

“…The sample covers the period from July 2004 to August 2018. Based on a recent study of Selmi et al . (2020), we use a new GPR index that incorporates recent geopolitical events neglected in the Caldara and Iacoviello (2018) index.…”

Section: Introductionmentioning

confidence: 99%

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Relationship between different sources of geopolitical risks and stock markets in the GCC region: a dynamic correlation analysis

Alqahtani

Hammoudeh

Selmi

2021

RBF

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PurposeThe findings would help in designing useful and relevant hedging strategies against geopolitical risks (GPRs), which are rampant in the Gulf Cooperation Council (GCC) region.Design/methodology/approachThis study focuses on the regional and global costs of GPRs for businesses in the Gulf region.FindingsThe results of the analysis show that the time-varying conditional correlation between the stock returns of the GCC countries and the Saudi Arabian geopolitical risk is consistently negative, suggesting that the Saudi Arabian geopolitical risk hurts the GCC stock markets, thus underscoring the importance of studying regional GPRs.Originality/valueThe contribution of this paper is twofold: First, it uses a newly geopolitical risk index that includes recent geopolitical events not included in the Caldara and Iacoviello (2018) index. In addition to war threats and acts, terrorist threats and acts and nuclear threats, the authors consider global trade tensions (GTTs), Saudi Arabia's geopolitical risk and OPEC news mainly related to OPEC oil production levels. Second, it assesses whether Saudi Arabia, which is the largest economy in the region and the main global oil exporter, is really a risk exporter to the rest of the GCC countries.

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Section: Methodology and Data Descriptionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Relationship between different sources of geopolitical risks and stock markets in the GCC region: a dynamic correlation analysis

Alqahtani

Hammoudeh

Selmi

2021

RBF

Self Cite

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“…After imposing a new round of sanctions on Iran in 2016 and 2017, the US announced its withdrawal from the Joint Comprehensive Plan of Action and banned its oil exports in 2018 [21][22][23], aiming to prohibit Iran's development of nuclear weapons [24,25]. This led other Persian Gulf countries, who own the largest amount of spare oil production capacity [26], to increase production and exports in order to address the gap in the global oil supply [5,[27][28][29]. In an escalation situation, in order to resist the US sanctions, Iran could harass-or even disrupt-oil transportation through the Hormuz Strait, as it did during the Iran-Iraq War [30,31].…”

Section: Introductionmentioning

confidence: 99%

How Do International Conflicts Impact China’s Energy Security and Economic Growth? A Case Study of the US Economic Sanctions on Iran

Cui

2021

Sustainability

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International conflicts cause global energy price fluctuations and supply disruptions, which can threaten energy security and economic growth in energy-importing countries, including China. However, the implications and impact mechanisms of international conflicts on the energy security and economy of oil-importing countries have been poorly explored. Using US economic sanctions on Iran as a case, a global energy-extended computable general equilibrium model, GTAP-E, is employed to assess the impacts of international conflicts on China’s energy production, trade and supply, sectoral outputs, and economic growth. The results indicate that the USA–Iran tension would threaten China’s energy security, mainly due to the instability of the energy supply and the consequent upsurge of energy prices. However, if increased oil exports from other Persian Gulf countries compensate for the global oil supply shortages, China’s energy supply would be generally assured. Moreover, because of the close energy cooperation links between Iran and China, the sanctions could decrease the Chinese outputs of non-energy sectors and economic growth. Nevertheless, compared with sole-sanction situations, the results from a possible USA–Iran tension escalation, going as far as Iran’s closure of the Hormuz Strait, could pose a more serious risk to China’s energy security and economic growth.

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Is renewable energy use lowering resource-related uncertainties?

Olanipekun¹,

Özkan

Olasehinde‐Williams

2023

Energy

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Oil price jumps and the uncertainty of oil supplies in a geopolitical perspective: The role of OPEC’s spare capacity

Cited by 16 publications

References 29 publications

Relationship between different sources of geopolitical risks and stock markets in the GCC region: a dynamic correlation analysis

Relationship between different sources of geopolitical risks and stock markets in the GCC region: a dynamic correlation analysis

How Do International Conflicts Impact China’s Energy Security and Economic Growth? A Case Study of the US Economic Sanctions on Iran

Is renewable energy use lowering resource-related uncertainties?

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