Oil Prices and Stock Market Impact in Kazakhstan: Boosting Energy Security in the Transition Process

Moldir Mukan, Yessengali Oskenbayev, Niki Naderi and Yergali Dosmagambet

Chapter 9 in Energy Security, Transition, and Economic Growth, 2025, pp 173-200 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This study investigates the complex relationship between oil price fluctuations and stock market performance in Kazakhstan, a resource-dominant economy heavily dependent on oil exports. Using structural vector autoregression (VAR) analysis, we explore how both global oil supply and demand shocks influence Kazakhstan’s stock market. Our findings show that aggregate demand shocks significantly affect stock market volatility, while oil production shocks have a more limited effect on financial stability. Given Kazakhstan’s dependence on oil revenue, the country faces significant economic risks when oil prices fluctuate. These risks are further compounded by the ongoing global transition towards cleaner energy sources. This paper argues that to enhance energy security and ensure economic stability during this transition, Kazakhstan must diversify its energy sources, invest in renewable energy, and strengthen financial resilience. The development of green financial instruments and policies that promote energy transition will play a crucial role in safeguarding the country’s long-term financial and energy security. Our study contributes to the existing literature by linking oil price volatility with the need for enhanced energy security strategies during Kazakhstan’s energy transition.

Keywords: Energy Security; Energy Transition; Just Transition; Economic Growth; Green Growth; Sustainable Development; Renewable Energy; Green Finance; Climate Finance; Carbon Emissions Reduction; Carbon Markets; Energy Efficiency; Environmental Sustainability; Policy Recommendations; Regional Analyses; Country-Level Studies; Energy Intensity; Capital Efficiency; Solar Technology Adoption; Health and Pollution; Southeast Asia; Central Asia; OECD Countries; Developing Economies; Electricity Tariffs; Energy Governance; Fossil Fuel Dependency; Economic Resilience; Agricultural Energy Use; Virtual Power Plants; Energy Policies; Energy Economics; Energy Poverty; Clean Energy Transition; Financial Incentives; Global Energy Markets (search for similar items in EconPapers)
JEL-codes: O13 Q01 Q42 Q43 Q48 Q54 (search for similar items in EconPapers)
Date: 2025
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