Not all political relation shocks are alike: Assessing the impacts of US-China tensions on the oil market

Valérie Mignon (), Yifei Cai and Jamel Saadaoui

No 2022-19, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: This paper assesses the effects of US-China political tensions on the oil market. Relying on a quantitative measure of these relationships, we investigate how their dynamics impact oil demand, supply, and prices over various periods, starting from 1971 to 2019. To this end, we estimate a structural vector autoregressive model as well as local projections and show that political tensions between the two countries pull down oil demand and raise supply at medium- and long-run horizons. Overall, our findings show that conflicting relationships between these two major players in the oil market may have crucial impacts, such as the development of new strategic partnerships.

Keywords: China; Oil market; Political relations (search for similar items in EconPapers)
JEL-codes: C32 F51 Q4 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2022
New Economics Papers: this item is included in nep-cna and nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Journal Article: Not all political relation shocks are alike: Assessing the impacts of US–China tensions on the oil market (2022)
Working Paper: Not all political relation shocks are alike: Assessing the impacts of US-China tensions on the oil market (2022)
Working Paper: Not All Political Relation Shocks are Alike: Assessing the Impacts of US-China Tensions on the Oil Market (2022)
Working Paper: Not all political relation shocks are alike: Assessing the impacts of US-China tensions on the oil market (2022)
Working Paper: Not all political relation shocks are alike: Assessing the impacts of US-China tensions on the oil market (2022)
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