Crude Oil Market Functioning and Sustainable Development Goals: Case of OPEC++-Participating Countries

Abstract

This article aims to substantiate the factors by which the oil industry influences the sustainable development of OPEC++-participating countries under conditions of uncertainty. The impact of the price parameters of the world oil market and the tools of its regulation on the sustainability of OPEC++-participating countries was assessed using panel regression analysis. The sustainable development level of OPEC++-participating countries was analyzed by the integrated estimation method, focusing on crude oil market functioning features. Undoubtedly, we can testify that there is a direct correlation between the country’s level of socio-economic development and sustainable development. In resource economies, a reduction in oil production and exports cannot have the same effect on sustainable development as in countries that do not produce oil, or are characterized by a higher level of economic development. With an appropriate level of economic diversification and the effectiveness of the institutional framework for managing the oil market, sustainable development can be achieved. Based on the model of the integrated assessment of the sustainable development of oil-exporting countries, the impact of statistically significant financial investors’ panic factor on the imbalance of oil prices due to the uncertainty of economic development was determined. Key indicators that create a panic factor in the oil market were identified. These include the indicators of the number of countries enforcing lockdown and the pandemic’s duration. We argue for the need to develop an effective strategy for achieving the sustainable development goals (SDGs) in OPEC++-participating countries, based on the management of crude oil supply and demand forces and by considering the effect of financial investors’ panic factor on the oil market.

Exploring the Dynamics of Brent Crude Oil, S&P500 and Bitcoin Prices Amid Economic Instability

“…When there is an excess of crude oil in the market, it results in a devaluation of crude oil prices and a significant reduction in sales revenues for these nations. This oversupply, aggravated by limited economic diversification within OPEC member states poses a threat to long-term economic development, social well-being and sustainable progress [84]. Vasilieva et al ( 2022) proved empirically that a rise in the spot price of Brent oil negatively impacts the sustainable development of OPEC+++ economies.…”

Hierarchical fuzzy model applied to oil trading

“…The fluctuations of international oil market have cause substantial attention around the scientific approach to answer important questions and creates better understanding into recent changes in the market. Vasiljeva et al (2022) explained why oil production impacts the sustainable development of OPEC countries in situations of great uncertainty.…”

Impact of Oil Exports on Imports of Agricultural Machinery and Equipment

“…The findings showed if the rices crude oil either in Dollars or in Rands will have significant negative effects on agricultural growth in South Africa. Vasiljeva et al (2022) used Panel Regression Model and studied the aims of sustainable development and crude oil market functioning features (oil price, oil production) of OPEC++ participating countries in 1992-2020. Findings reveal that reducing oil volume implied in OPEC+ and OPEC++ agreements will lead to stabilization of oil prices.…”