Facebook LinkedIn Twitter
Shop
Article Details

IAEE Members and subscribers to Economics of Energy & Environmental Policy : Please log in to access the full text article.

Prepress Content: The following article is a preprint of a scientific paper that has completed the peer-review process and been accepted for publication within Economics of Energy and Environmental Policy.

While the International Association for Energy Economics (IAEE) makes every effort to ensure the veracity of the material and the accuracy of the data therein, IAEE is not responsible for the citing of this content until the article is actually printed in a final version of Economics of Energy and Environmental Policy. For example, preprinted articles are often moved from issue to issue affecting page numbers, and actual volume and issue numbers. Care should be given when citing Economics of Energy and Environmental Policy preprint articles.

The Coupled Cycles of Geopolitics and Oil Prices

Abstract:
We analyze the coupled cycles of Middle-East geopolitical violence and oil prices. Building on earlier work that shows that low oil prices are regularly followed by geopolitical strife, and that the latter is usually followed by higher oil prices, due to actual or feared disruption in oil supply, we focus in this paper on one particular factor: Which geopolitical events are most likely to lead to sustained supply disruptions? Using discrete wavelet analysis of oil production at the country level, we find that military conflicts that destroy production installations or disrupt oil transportation networks are the most significant antecedents of sustained, long term, disruptions in oil supply; whereas nonviolent regime change, internal political strife, and low level geopolitical tensions have more limited sustained impact. We discuss a framework to analyze whether conflict-related disruptions to oil supply could be endogenous to the oil cycle and offer some policy considerations for ameliorating that cycle's impacts.
Purchase PDF ( $35 )
Executive Summary: View
Keywords: Middle-East, Violence, Oil Prices

DOI: 10.5547/2160-5890.7.2.melg


Reference information is available for this article. Join IAEE or purchase the article to view reference data.


Published in Volume 7, Number 2 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.