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 language | English |
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Title of host publication | Handbook on Oil and International Relations |
Editors | Roland Dannreuther, Wojciech Ostrowski |
Publisher | Edward Elgar Publishing |
Chapter | 22 |
Pages | 336-355 |
Number of pages | 20 |
ISBN (Electronic) | 9781839107559 |
ISBN (Print) | 9781839107542 |
DOIs | |
Publication status | Published - 16 Aug 2022 |
ASJC Scopus subject areas
- General Social Sciences
- General Business,Management and Accounting
- General Environmental Science
- General Energy