Asian geopolitical risks: A key driver behind WTI-Brent spread market volatility

Shaojiang Wu and Wei Han

Finance Research Letters, 2025, vol. 77, issue C

Abstract: Using the quantile-based Granger causality test, we explore how geopolitical risks in Asian countries affect the price spread between WTI and Brent crude oil. Our findings highlight varied regional effects, predominantly within the lower (0.10∼0.25) and upper (0.60∼0.80) quantiles of the distribution, despite developing three quantile-based models. Furthermore, our results suggest that Asian geopolitical risks exert similar influences on the price spread as global risks, indicating their potential to significantly impact the dynamics of the international energy market. Thus, Asian geopolitical risks may play a crucial role in shaping the future of the international energy futures market.

Keywords: WTI-Brent spread; Geopolitical risk; Asia; Quantile; Granger causality (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003538

DOI: 10.1016/j.frl.2025.107090

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