Oil price volatility: cartels, geopolitics and speculation

Research output: Chapter in Book/Report/Conference proceedingChapter (peer-reviewed)peer-review

Abstract

This chapter studies factors determining oil price volatility and explores the role of cartels, geopolitics and financial speculation in oil price movement. We first lay out a framework for analysing the dynamics of oil prices, highlighting the key differences between OPEC and NonOPEC suppliers. We then discuss the impact of geopolitical events, the interaction between price determination in physical markets and futures markets, and the role of financial speculation in driving oil price dynamics. The chapter concludes that even though OPEC only accounts for approximately 40% of global oil production, it continues to have a considerable impact on oil prices. Geopolitical events have rarely had long-term impacts on prices and the effect of financial speculation is similarly exaggerated. Overall, it is supply and demand and the differential rents arising from differences in the costs of production that are important.
Original languageEnglish
Title of host publicationHandbook on Oil and International Relations
EditorsRoland Dannreuther, Wojciech Ostrowski
PublisherEdward Elgar Publishing
Chapter22
Pages336-355
Number of pages20
ISBN (Electronic)9781839107559
ISBN (Print)9781839107542
DOIs
Publication statusPublished - 16 Aug 2022

ASJC Scopus subject areas

  • General Social Sciences
  • General Business,Management and Accounting
  • General Environmental Science
  • General Energy

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