Geopolitical Risk and Energy Market

Hudecova Kristina () and Miroslava Rajcaniova
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Hudecova Kristina: Institute of Economic Policy and Finance, Slovak University of Agriculture in Nitra, Nitra, Slovakia

Peace Economics, Peace Science, and Public Policy, 2023, vol. 29, issue 2, 171-187

Abstract: The fundamental aim of this paper is to test the symmetric and asymmetric effects of geopolitical risk on the five selected prices of energy commodities, consisting of coal, crude oil, gasoline, heating oil, and natural gas, during the period 2 January 2020–29 July 2022 by application of linear and nonlinear ARDL models. Moreover, we also study the impact of anticipated financial volatility on energy commodities. Our results suggest that, over the long term, there is no linear relationship between geopolitical risk, financial volatility, and energy prices. On the other hand, we find statistically significant asymmetrical effects of geopolitical risk and financial volatility on crude oil, gasoline, and heating oil prices in the long and short run. We also identify that coal and natural gas prices do not respond to changes in geopolitical risk during the analysed period.

Keywords: energy commodity; geopolitical risk; financial volatility (search for similar items in EconPapers)
JEL-codes: C32 C50 Q40 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/peps-2022-0033

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