Pandemic, Ukraine, OPEC+ and strategic stockpiles: Taming the oil market in turbulent times

Hossa Almutairi, Axel Pierru and James L. Smith

Energy Economics, 2025, vol. 144, issue C

Abstract: With a simple decomposition method, we estimate the monthly shifts in global oil demand and non-OPEC+ supply that have occurred since 2010. We find evidence that during the Jan 2017- Sep 2024 period OPEC+ attempted to stabilize the price of crude oil much below the values assessed by market observers. Using a structural model of OPEC+’s behavior, we find that judgmental errors regarding the size of market shocks that OPEC+ attempted to offset significantly increased after the start of the Pandemic due to the unprecedented nature and size of those shocks. Despite this, without OPEC+’s actions the price volatility would have been much higher than actual, nearly doubled during the Pre-Pandemic period (Jan 2017-Feb 2020), and higher by 86 % during the Pandemic (May 2020 – Jan 2022) and by 50 % during the Ukraine War (Feb 2022 – Sept 2024). Our results provide evidence that actions taken by consuming countries during the Ukraine War, such as coordinated releases from national stockpiles of crude oil, contributed to reduce price volatility by at least 20 % (2.4 percentage points), a factor that OPEC+ appears to have factored into its production plans.

Keywords: OPEC+; Oil Price; Volatility; Spare capacity; Market stabilization; Strategic stockpiles; Ukraine; Pandemic (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988325001422
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:144:y:2025:i:c:s0140988325001422

DOI: 10.1016/j.eneco.2025.108319

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().