A simple model of global fuel consumption

Doga Bilgin and Reinhard Ellwanger

Energy Economics, 2024, vol. 130, issue C

Abstract: We present an SVAR model of the global oil market that utilizes information on global oil consumption in the form of fuels. Under mild identifying assumptions, data on global fuel consumption provides comparatively sharp insights into structural parameters of the global oil market. The estimated short-run global fuel demand elasticity with respect to crude oil prices is around −2%, which is considerably more inelastic than estimates of local fuel demand elasticities based on disaggregated data. Our framework provides new evidence on the drivers of oil-market dynamics and on the effects of climate change policies that act through the price of oil.

Keywords: Oil price shocks; Oil demand; Oil supply; Elasticities; Structural modeling; Oil prices and macroeconomic fluctuations (search for similar items in EconPapers)
JEL-codes: C51 L71 Q41 Q43 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:130:y:2024:i:c:s0140988323007521

DOI: 10.1016/j.eneco.2023.107254

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