Unveiling the impact of geopolitical conflict on oil prices: A case study of the Russia-Ukraine War and its channels

Qi Zhang, Kun Yang, Yi Hu, Jianbin Jiao and Shouyang Wang

Energy Economics, 2023, vol. 126, issue C

Abstract: The Russia-Ukraine War, which has lasted for over a year, has been proven to significantly impact crude oil prices. This article aims to explore the channels through which the Russia-Ukraine War affects crude oil prices and to assist decision-makers in channel intervention to mitigate the impact of the war. To this end, the study proposes a research method called “Compare Real Data with Predicted Data and Match Influencing Factors” (CRP-MIF). The method reveals that the Russia-Ukraine War, through its impact on speculative activities, inventory, and supply-demand balance, combined with production announcements of Organization of the Petroleum Exporting Countries (OPEC), led to sharp short-term fluctuations in international oil prices and rapid price increases. Among these channels, speculative activities, inventory, and supply have a substantial impact. Relevant entities can weaken the impact of the war on oil prices and macroeconomic factors by intervening in these transmission channels. This study provides a new reference paradigm for studying the impact channels of major crisis events on commodity prices.

Keywords: Geopolitical conflict; Russia-Ukraine War; Crude oil price; Transmission channels (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:126:y:2023:i:c:s0140988323004541

DOI: 10.1016/j.eneco.2023.106956

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