Geopolitical Events and Economic Uncertainty in Crude Oil Market Fluctuations

Leena Ajit Kaushal ()
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Leena Ajit Kaushal: Management Development Institute

A chapter in Proceedings of the International Research Conference on Resilience for Sustainability: Management Practices and Strategies for the Future (IRC 2025), 2025, pp 118-128 from Springer

Abstract: Abstract This research explores the consequence of Global Economic Policy Uncertainty (GEPU) on the crude oil prices (COP) volatility subsequent to the Russia-Ukraine conflict, employing an econometric methodology that incorporates OLS regression, cointegration analysis, and VAR models. Analysis of monthly data spanning February 2022 to June 2024 indicates a robust positive correlation between GEPU and oil price volatility, with GEPU accounting for 52.7 percent of the volatility. Cointegration and VAR models are utilized to analyze non-stationary data, demonstrating a substantial long-term link between GEPU and COP volatility. Causal relationships over both near-term and extended periods time horizons are validated by the VECM. Findings indicate that geopolitical crises, as evidenced by indices like economic-policy-uncertainty, significantly impacts crude oil price dynamics.

Keywords: Geopolitical events; crude oil; market fluctuation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-860-8_9

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DOI: 10.2991/978-94-6463-860-8_9

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