Oil supply and U.S.-China tensions: A multinational perspective

Xiaozhu Guo, Yanran Hong, Shibin Yao and Yixue Hao

International Review of Financial Analysis, 2025, vol. 104, issue PA

Abstract: The current context of heightened U.S.–China tensions impact various aspects of the global economic and geopolitical scene. Understanding their implications for global resources, such as crude oil, is crucial. This study focuses on how U.S.–China tensions affect the global crude oil supply in industrialized countries. Using the newly developed U.S.–China tensions (UCTs) index, we analyze the macroeconomic effects of these tensions on the crude oil supply. Research shows that U.S.–China tensions significantly affect the crude oil supplies of Canada and the U.S. However, in the long run, the influence on these two countries and others is less pronounced. Additionally, within specific time frames, tensions have notably affected the supplies in Canada, the U.S., Germany, and Korea. Moreover, an in-depth study reveals different responses among countries at various quantiles, meaning that the impact is nonlinear and asymmetric. Overall, this research offers new insights into the implications of U.S.–China tensions for the global economy and energy security, helping us better understand the complex link between geopolitics and the energy market in industrialized nations.

Keywords: U.S.–China tensions; Industrialized countries; Oil supply; Granger causality (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:104:y:2025:i:pa:s1057521925003655

DOI: 10.1016/j.irfa.2025.104278

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