UNDERSTANDING THE REVENUE PROFILES OF OPEC MEMBER COUNTRIES IN THE FACE OF OIL PRICE FLUCTUATIONS AND ECONOMIC POLICY UNCERTAINTY
DOI:
https://doi.org/10.18623/rvd.v22.n6.4007Palabras clave:
Oil Price Benchmark, OPEC, Revenue Profile, Economic Policy UncertaintyResumen
Majority of OPEC member countries are familiar with the concept of ‘Dutch Disease,’ as they have neglected other sectors of their economy due to the revenue from crude oil. This has resulted to a structural imbalance and fiscal vulnerabilities in a good number of these economies. This is exacerbated by the oil market that remains highly volatile in the light of global uncertainties and geopolitical tensions. While existing literatures have explored these issues in isolation, this study investigated the interactive effect of oil price fluctuations and economic policy uncertainties. The study seeks to evaluate the responsiveness of revenue profiles of OPEC member countries to oil price fluctuations and economic policy uncertainties. Autoregressive Distributed Lag (ARDL) was employed for the countries-by-countries estimation to address the aggregative bias which is common with panel data estimation. The findings revealed that the government revenue of OPEC member countries has a positive and significant relationship with OPEC spot prices and a non-significant relationship with the other major global oil pricing benchmarks like NYMEX WTI, ICE Brent and DME Oman. The study also discovered that both global economic policy uncertainties and the interactive effect of oil price fluctuations and global uncertainties have a significant but negative relationship with the government revenue of OPEC member countries. The study suggests the acceleration of economic diversifications to reduce over-reliance on oil revenue while creating a safeguard against oil price volatilities.
Citas
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