Oil Earnings Research Articles

Food Insecurity in the Middle East, the Black Sea Grain Initiative, and Türkiye

Almost all Middle Eastern nations now struggle with malnutrition and allocate a significant portion of their oil earnings to food. In addition to already challenging and changing climate and water pressure, ongoing conflict and the war atmosphere, poverty, a lack of purchasing power, and pandemic diseases in the region all seem to play a role. However, the deepening of Russia’s conflicts with Ukraine in recent years has made matters worse for the hungry in this fragile region and placed even self-sufficient nations in a precarious position. This paper addresses the Black Sea Grain Corridor Initiative, which was implemented through diplomatic measures hosted by Türkiye and guaranteed the secure transportation of Ukrainian grain to international markets. The study begins with a thorough discussion of the origins and effects of food insecurity in Middle Eastern countries. The second part examines the impact of this initiative on regional politics. To address the current issue, an integrated approach built on comprehension of cause-and-effect interactions has been implemented. The findings were gathered using a data collection technique.

The growth effect of crude oil revenue and capital investment: The Nigerian perspective

AbstractThis study assesses how oil revenue and capital investment affected Nigeria's economic growth from 1981 to 2020. The study uses the autoregressive distributed lag (ARDL) and Toda–Yamamoto causality models for analysis. More so, we considered the possibility of structural break and thus utilised the Lee–Strazicich LM unit root test. The structural break unit roots confirm the stationarity of the variables with identified breakpoints. Therefore, the ARDL result reveals that crude oil revenue enhances short‐ and long‐term economic growth; the short‐term effect is insignificant, but it is very substantial in the long term. Again, capital investment positively but insignificantly drives short‐period economic growth. However, capital investment substantially promotes long‐term economic growth. The causality evidence indicates that crude oil revenue causes capital investment and economic growth. Also, capital investment and economic growth exhibit bidirectional causality. The evidence suggests improving oil revenue by increasing crude oil exports and ensuring pipeline security to reduce oil theft. The government should channel crude oil earnings toward capital investment to promote real economic productivity.

Disturbing Effects of Global Oil Price Changes: Case of Azerbaijan

General topic in this paper is the role of oil industry in global economy and the result of changing oil prices on economic variables in Azerbaijan. The major aim is to analyze the effects of crude oil price changes on Azerbaijan economy in order to measure how changes in oil prices affect its basic economic variables. At the beginning, a general outlook on oil industry will be given and the main oil exporting economies will be analized. However, main focus will be on the structure of Azerbaijan’s economy and it will examine the example of Azerbaijan as a transition economy where oil and gas production and exports have steadily increased from the mid ‘90s. Many critical oil and gas extraction projects have been implemented; while the oil and gas sector's dominance in the economy poses a number of threats to the balanced development of the country's economy. It will show how the economy of Azerbaijan was affected after the oil crisis, such as other developing countries that mainly depending on oil and petroleum products. For this purpose, VEC Model has been applied, consdering Azerbaijan Statistic Data and analized the effects of oil price fluctuations on its economic variables parallel with the oil industry. The main findings indicate that Azerbaijan's economy is strongly dependent on resource exports, which produce high growth rates when commodity prices are favorable, but end up with lower macroeconomic performance when global oil prices fall. It is clear that the main income of Azerbaijan comes from oil and oil products, so the export of oil will have a high impact on the saving level of the population. At the time of high revenues come from export and the low exchange rate of the foreign currency in Azerbaijan has also led to the low cost of imported goods. As well demonstrated in the research, Azerbaijan economy has been widely exposed to major crude oil price distortions. It can be said that in order to avoid increasing overdependence on oil earnings, diversifying the economy should be a top priority.

The Need for Diversification of the Nigerian Economy through a Low-Carbon Energy Mix Programme Using Nuclear Power

Numerous structural issues, such as poor infrastructure, trade and non-tariff barriers, investment barriers, a lack of trust in the currency's worth, and restricted foreign exchange facilities, limit Nigeria's economic potential. Since the late 1960s, when the oil and gas industry replaced agriculture as the primary driver of expansion, there has been very little progress made in diversifying the economy and laying a stronger foundation for rapid, steady, and productive growth. Despite massive oil earnings, the nation remains among the World's poorest in terms of important development indicators. Prosperity and progress have not followed as expected. The economy continues to grow in an unpredictable manner, devoid of steady or constant growth, and is influenced by fluctuations in the price of oil and gas, despite a multitude of plans, frameworks for policy, and reforms. While incompetence, corruption, and inefficiency remain at the core of economic management, every plan, programme, vision, and change raises high aspirations but never achieve the desired impact. Nigeria's economic dependency on crude oil and other commodities makes economic diversification difficult. Nigeria's economy must diversify in order to support employment, economic growth and human development to meet up the country's fast expanding population needs. In order to have a life beyond oil and gas, there is therefore the need for an efficient energy programme using nuclear power base load option for the country's rapid industrialization; this research looks at an overview of Nigeria's economy, its various sectors, its challenges, and the role of nuclear power as a possible solution to those challenges.

Effect of Crude Oil Revenue on the Oil and Non-oil Sectors in Nigeria

Abstract The debate for oil-rich economies to plough their oil windfalls into real economic activities to spur diversification has become intense due to the deficit fiscal crisis and poor socio-economic profile of resource-abundant nations. Therefore, we use secondary data from the period between 1981 and 2020 to assess the impact of crude oil revenue on the oil and non-oil sector output performance in Nigeria. The study adopts the ARDL (i.e. autoregressive distributed lag) and the augmented Granger causality techniques to analyse the data. The ARDL regressions show that crude oil positively impacts oil sector performance, but the impact is only substantial in the short run. Crude oil revenue exerts a positive and insignificant effect on the short-run non-oil sector output, whereas, over the long run, it has a negative but significant effect. To propel growth, the study recommends using the excess crude oil earnings to develop non-oil sectors such as agriculture, services, and manufacturing.

Iraqi Economy and Renewable Energy Projects Between Economic Necessity and Investment Challenges

Purpose: Given Iraq's current excessive fossil fuel output, this article seeks to investigate the country's potential for future renewable energy sources. The report also endeavors to foresee Iraq's future position in clean energy production in Iraq and throughout the globe and the rate at which the global energy market will shift towards renewable energy sources.
 
 Theoretical framework: Iraq's reliance on oil earnings and the country's overburdened public sector poses serious economic issues. There is a domination of state-owned firms, stringent laws, a need for more access to finance, a shortage of competent labor, and poor infrastructure that limits the expansion of numerous industries. Growth in recent years has not led to decreased poverty since the economy has changed greatly since 2014.
 
 Design/Methodology/Approach: The study included both retrospective and prospective approaches. The most pressing problems in implementing and making use of renewable energy sources were described and analyzed descriptively. Future outcomes for the Iraqi economy were envisioned using a prospective approach in the form of development scenarios.
 
 Findings: A significant source of international capital flows and a key source of funding for economic growth, foreign direct investment (FDI) has mostly focused on the oil industry and certain tourism projects. As a result of the country's outdated energy grid, investors are interested in something other than investing in Iraq's electrical industry.
 
 Research, practical & social implications: We describe the current issues confronting Iraqi economic development, including the need for more diversity in the economy, structural imbalances between the main sectors, and the near-total dependence on crude oil export revenues, resulting in a decline in industrial production.
 
 Originality/Value: We describe the reality of the Iraqi economy, analyze the structure of Iraq's energy sector based on conventional energy, and then find out about the progress made in renewable energy and existing and future projects under fossil fuels.

<p>Investigate the Effect Oil Price Volatility for The Period (2010 -2020) on the Economic Situation Based ARDL Approach</p>

In this study , governments in oil-producing countries rely heavily on oil income to fund their budgets and exert political influence. Increases in government expenditure are a direct result of a surplus of funds, as would be expected from standard economic theory. This is precisely why Extremely high oil prices in 2010and 2020 caused tremendous budgets in the Iraqi economy. Investment, which would have been the primary beneficiary of the government expenditure process, was ignored. They missed a chance to diversify their economies and industries by concentrating solely on leisure and consumption. The progress of the Iraqi economy is unimpeded by a shortage of resources or money. Oil earnings and governmental spending are the primary factors studied due to their close relationship. The sample size was organized , and the data collected was quarterly, which is more timely than annual data. Keeping an eye on it all the way from 2010 till 2020. A quiet test was performed on the series to see if those two factors were present, and the results showed that they were not. As soon as they take the first difference and the graph examination, they find their footing and are able to continue on with the rest of the exams with ease. The right model was chosen, and an autoregressive distributed-lag (ARDL) technique was used..

Sustainable Growth and Diversification in the Nigerian Economy

The inherent abnormality in Nigeria’s one-product economy, which has been a problem throughout the course of many years, was the topic of discussion in this study. In the article, the issue of the country’s excessive reliance on oil as its principal source of revenue was discussed. The country fell into a recession as a result of its overwhelming reliance on oil earnings, which caused the government to ignore the needs of other areas of the economy. In the paper, we discussed themes that are related to sustainable development, such as how the economy of the country needs to be diversified in order to have good governance. Concerns were recognised and brought up in conversation, and suggestions were emphasised.

Nigeria’s Vulnerability to Global Oil Dynamics and Politics

The paper analysed global oil dynamics and politics and their implications for Nigeria’s development. It adopted systems theory as its theoretical framework and employed the qualitative method as its methodology, in which face-to-face interview was used in obtaining primary data from relevant respondents alongside secondary data from relevant academic works. The paper found out that Nigeria has been negatively affected by the changing dynamics of international petroleum politics, particularly by the fall in global oil prices, as Nigeria depends heavily on oil earnings to meet its budgetary provisions for national development. This is further compounded by mismanagement of the accrued oil wealth before the collapse of oil prices and increased geopolitical tension. Nigeria should without further delay, diversify its economy away from oil to other viable and less volatile sectors, such as agriculture and solid minerals, manufacturing, Information and Communications Technology (ICT), aviation services and so on, alongside the strengthening of its bargaining power in global petroleum politics, particularly in the Organization of Petroleum Exporting Countries (OPEC), availing itself of the advantage of its leadership position in OPEC and the political leverage it has as a strategic actor in international oil politics.

Comparative analysis of oil-driven economic policies for Saudi Arabia and Iran; using the CGE model

With its leading contribution to GNP, prior position in funding the public budget, and a prominent share in the national exports, the oil sector contemporarily plays a substantial role in Saudi and Iran's economies. However, massive accumulated oil earnings, the lowest oil production costs, and a superior rank in the world's proven reserves, indicate the economic improvement potential. Accordingly, analyzing feasible improvement in these economies through amplifying the oil sector by measures that take to (1) the public budget components, (2) the oil revenues quotas, and (3) the composition of national imports and exports via a General Equilibrium procedure is the main goal of this research.Relatively upper growth potential with lower stability was revealed under more intensive linkages between Saudi Arabia's national economy and oil sector and its more in-depth mutual dependence on the global oil market (than Iran). Consequently, Saudi Arabia should suffice on slight permanent oil raises or (at the most) quite temporary, notable ones. On the contrary, persistent, (proportionally) notable oil rises are advised for Iran. Moreover, the fiscal expansions reinforce Saudi Arabia's oil-amplifying actions while making Iran's progress sluggish, especially in case of remarkable oil rises.Meanwhile, slight oil output rises could be provided by the existing spare capacities; productivity improvement, economic relationships reform, and rearranging oil revenue quotas will be required for further progress.

The Role of Monetary Policy Tools on Stability of Iraqi Economy: A Macroeconomic Analysis (2004-2018)

Monetary coordination and macroeconomic stability are increasingly critical for domestic and fiscal policy in the aftermath of the global financial crisis. This research investigates the impact of monetary policy on financial and economic stability following the COVID-19 pandemic's economic lockdown. This article utilized a V.A.R. (Vector Autoregressive Models) estimator for time series data models. Quarterly statistics are gathered from the first quarter of 2004 to the first quarter of 2018. Using a V.A.R. model, the study investigates the causal connections between monetary policy instruments and economic stability. The findings suggest that Iraq's monetary policy is most efficient at maintaining a target growth rate for the money supply while simultaneously controlling inflation through an equalization cap (1.8 percent). Due to the rentier structure of the Iraqi economy, the money supply had a negligible influence. Monetary authorities must monetize oil earnings in order to finance public spending. Finally, an appropriate framework for monetary management must be created that ensures monetary independence and supremacy remain unimpaired. The findings give a thorough knowledge of the links between national monetary policies and economic stability, which can eventually aid in developing nations' formulation of good monetary and fiscal policies.

The implication of Energy on Nigeria’s Economy: Case Study of Crude Oil Energy Source

The shortfall in crude oil production, the major source of energy supply and revenue generation in Nigeria, affects all spheres of activities in the country. Activities like politics, economic, budgeting, infrastructural development, the standard of living, and foreign exchange reserve. Therefore, it is imperative to address the implication of energy (crude oil source) on the economy of Nigeria. Hence, a linear regression analysis was used and by first creating a link between oil production (main energy source) and oil earnings (economy) to establish a relationship upon which social-political factors such as the organization of petroleum exporting countries (OPEC), civil disturbance, flexible regulating framework, infrastructural services, community inclusion for equitable sharing of benefit, and Niger Delta development commission are used as check and balance on oil production and oil earning and their implications on the Nigeria economy. By way of calibration, the paper examines the amount of oil per barrel needed to be produced in a year that would guarantee an increase in oil earnings in Nigeria. The data used for this analysis were collected from the central bank of Nigeria (CBN) statistic bulletin on crude oil production and total earning in Nigeria between 1980 to 1999. The paper also suggests measures that would enhance the increase in the production of oil from which the country would be able to earn more revenue. The result shows that increasing oil production will simultaneously increase earnings from oil and, consequently, overhaul the various activities such as economy, infrastructural development, health, education sectors, and living standard of the citizen.

Oman’s Trade Potentials with Indian Ocean Rim Countries

Abstract Oman’s regional trade flow, especially with the Indian Ocean Rim countries, is examined within a gravity model framework. The analysis is based on the generalised method of moments (GMM) estimation procedure. The findings show that Oman’s exports are strongly determined by the Indian Ocean Rim countries’ populations, gross domestic product, infrastructure, Oman’s trade policy and a common border and language. Distance is found to induce significant friction for Oman’s imports. We conclude that the Indian Ocean Rim countries are sources of active markets and provide opportunities for greater trade integration. In light of the dramatic decline in world oil prices in recent years, Oman also needs to reduce its reliance on oil earnings and intervene more aggressively in its domestic economy by diversifying its non-oil sector and concentrate more on non-oil led exports.

Impact of energy and economy in Nigeria

The shortfall in crude oil production, the major source of energy supply and revenue generation in Nigeria, affects all spheres of activities in the country. Activities like politics, economic, budgeting, infrastructural development, standard of living and foreign exchange reserve. Therefore, it is imperative to address the impact of energy (crude oil source) on the economy of Nigeria. Hence, using a linear regression analysis, this paper first established a link between oil production (main energy source) and oil earnings (economic). By way of calibration, the paper examines the amount of oil per barrel needed to be produced in a year that would guarantee an increase in oil earnings in Nigeria. The paper also suggests measures that would enhance the increase in the production of oil from which the country would be able to earn more revenue. The result show that increasing oil production, will simultaneously increase earning from oil and, consequently, overhaul the various activities mentioned earlier for the well-being of mankind. Keywords: Crude oil, Poverty, Revenue, Energy, CBN

The macroeconomic impact of oil earnings uncertainty: New evidence from analyst forecasts

We develop measures of oil earnings uncertainty (OEU) using analyst forecasts drawn from a large firm-level dataset. OEU is related to future economic downturns, so some OEU measures may serve to forecast future downturns. An increase in OEU also has adverse effects on the US oil sector. The results are robust to conditioning on aggregate uncertainty. At the same time, OEU is related to increases in stock prices – unlike aggregate uncertainty, which has the opposite effect. OEU is thus an independent influence on both the oil industry and on economic aggregates.

Interest Rate Management and the Nigerian Economy (1986 — 2018)

This study sought to examine the impact of interest rate on the Nigeria’s economy during the pre and post Regulation periods (1986 – 2013). It also investigated the joint influence of Inflation, Investment, Exchange Rate, Money Supply and Monetary Policy Rate individually on the Gross domestic Product which was used a proxy for output as well as the causality between all the factors combined and gross domestic product. Ex post facto method was adopted In order to test the hypothesis, the researcher adopted Augmented Dickey Fuller, ARDL, Bound Test and Error Correction Model. The result showed that no significant relationship exists between Gross Domestic Product and Investment, Exchange Rate and Money Supply while still affirming that a significant relationship exist between Gross Domestic Product, Monetary Policy Rate and inflation. The eye of the authorities should be on Inflation at all times, Prudent management of our Oil earnings, adequate savings (Foreign Reserve) and investments as these will help stabilize the fluctuating exchange rate with its consequent influence on interest rate and economic growth.

The political economy of recession in Nigerias fourth republic

In recent times, an exceptionally large and virulent recession engulfed the Nigerian State that had for the previous two and half decades experienced sustained growth at unprecedented levels. The causes as well as sense of threat and uncertainty induced by the crisis have been differently interpreted, particularly from the macro-economic, leadership and strategic standpoints. This paper offers a political economy explanation of recession in Nigeria's Fourth Republic. The study adopts the descriptive/qualitative research technique to probe the following questions: What are the factors responsible for the crisis? What is the relationship between the structure of the Nigerian State and recession? How may recession be checked? The paper argues that recession expresses the capitalist nature of the Nigeria State. Moreover, lack of political will of the successive governments to save, corruption, mismanagement and overdependence on oil earnings, among other, are the factors that instigated the recession. The study recommends substantial structural reforms that will overthrow the system that serves the narrow interests of the capitalists class rather than people. There is also the need to diversify the nation's economy, particularly investing on the non-oil sector such as manufacturing and agriculture production. Key words: Nigeria, recession, gross domestic product, corruption, fourth republic, crude oil earnings.

Implications of Crude Oil Price Volatility and Parallel Exchange Rate Fluctuation on the Cost of Living in Nigeria

As the sixth largest exporter of crude oil, Nigeria heavily depends on oil earnings to fund economic activities. The country also rely heavily on imports of consumables, both oil and non oil consumables. Nigeria’s vulnerability to crude oil price shock at the international oil market exposes the nation to certain unfavourable results. The study investigated the influence of crude oil price volatility on parallel exchange rate and their influence on the cost of living and doing business in Nigeria. Two stage least square, generalized autoregressive conditional heteroscedasticity, vector error correction, impulse response and variance decomposition was employed to measure the influence of crude oil price on parallel exchange rate and their influence on cost of living in Nigeria. Crude oil price volatility negatively and significantly influenced parallel exchange rate fluctuation and consumer price index in Nigeria. Parallel exchange rate positively and significantly influenced consumer price index in Nigeria. Declining crude oil prices implies decreasing income for the Nigerian economy and in turn per capita income. Rising cost of living with declining per capita income further impoverishes Nigerians. Therefore Nigeria should effectively take control of the production of crude oil, increase her refining capacity and increase production and export of other products with comparative advantages.

The Restructuring of the Nigerian Economy and the Nigerian Oil Sector Earnings Nexus

Nigeria is endowed with abundant natural resources of which petroleum resources play a dominant role in the economy. These resources can be effectively harnessed and managed for the benefit of all Nigerians. Petroleum Profit Tax is a major source of revenue for the Federal Government of Nigeria to meet its statutory obligations of ensuring the economic development of Nigeria. In order to make the business environment conducive for new investments, the government began to invest the new found oil wealth in socio-economic infrastructure in the urban areas. The relative attractiveness of the urban areas made many able-bodied Nigerians to migrate from the hinterland, abandoning their farmlands for the cities and hoping to partake in the growing and prosperous (oil-driven) urban economy. This created social problems of congestion, pollution, unemployment and crimes.In the light of this study, the objective is to assess the impact of crude oil earnings and its significance in shifting the structure of the Nigerian economy. The scope of the study is limited to only the oil sector and its significance in the shifting of Nigerian economy using the 1994 to 2012 data set. The OLS (Ordinary Least Square) multiple regression analysis was used with the aid of E-Views to examine the relationship between petroleum profit tax and Nigerian economic growth from 1994 to 2012,using the gross domestic product (GDP), Petroleum Profit Tax (PPT), Inflation (INF) and Exchange rate (EXCH) as variables. Unit root tests were carried out to evaluate the time series properties of these variables and Co-integration test was carried out to check for the existence of a long-run relationship between the variables. Empirical results obtained showed that there is positive impact on GDP by petroleum profit tax. However, the impact on GDP is low (about 14%) relative to other productive sectors such as Agriculture. Unit root test results reveal the presence of stationarity among the variables at 5% and the co-integration test shows the existence of a long-run relationship. It is recommended that Government should transparently and judiciously account for the revenue it generates through PPT by investing in other productive sectors such as the industrial and agricultural sectors as well as in the provision of infrastructural facilities. The government should also attend to the issues of tax avoidance and evasion by exploration and production companies, and should begin to provide high quality public goods to boost the morale of tax payers.

Diversifying Nigeria\'s petroleum industry

Nigeria's extreme reliance on crude oil earnings has triggered structural difficulties for its economy and exacerbated the neglect of other productive sectors of the economy. The paper suggests, therefore, the deepening of the country's economic reform initiatives to include effective diversification of the petroleum sector and development of the agriculture and solid minerals sectors for the global markets. NESG Economic Indicators Vol. 13 (4) 2007 pp. 41-49