Organization Of The Petroleum Exporting Countries Member Research Articles

Relationship between crude oil price and production levels—An empirical study of OPEC and non-OPEC states

This work explores the relationship between the price of crude oil and its production through an empirical study on the regions of the Organization of the Petroleum Exporting Countries (OPEC) and non-Organization of the Petroleum Exporting Countries (non-OPEC). The crude oil price has recently been fluctuating greatly that it cannot be predicted; this fluctuation causes changes in the prices of raw materials for everyday life, thus affecting the economy worldwide. To better understand the factors that affect the crude oil price, this study gathered monthly oil production by OPEC and non-OPEC members, which are divided into the regions of Europe, America, and Asia according to the U.S. Energy Information Administration (2015). Data on the West Texas Intermediate (WTI), Brent, and Dubai oil prices in the period from January 1995 to November 2015 were also gathered and subjected to unbalanced panel random effect regression to investigate the relationship between crude oil price and oil production and to determine whether the oil production by these countries have a significant effect on the fluctuation of crude oil price. This study explored the relationship between production and price, specifically that of crude oil. Hence, it investigated whether and how the changes in monthly crude oil production by OPEC and non-OPEC members in Europe, America, and Asia have affected the changes in three major crude oil prices, namely, WTI, Brent, and Dubai, in the following terms.

Determinants of economic growth: Panel data analysis of OPEC

The article deals with the study of the determinants of economic growth of the Organization of the Petroleum Exporting Countries (OPEC), which are all developing countries. The issue is examined because the organization affects the price of oil worldwide. Panel data analysis with the random effects model is used. The panel data analysis examines the relationship between GDP and the selected determinants from 1980 to 2019. The analysed data are non-standard. They are affected by volatility, missing values, and credibility. For example, countries such as Venezuela, Iran, or Iraq may provide data which can distort the analysis. The results show a correlation of a total of five variables. The correlation has both positive and negative effects on GDP. Daily oil production, oil exports and oil prices positively affect GDP, contributing to GDP growth. Unemployment and exchange rate have a negative effect. No correlation was found between inflation, population growth, oil demand, and GDP. The analysis can be used as a basis for future decision-making by OPEC Member economies.

Resource curse hypothesis: fresh evidence from OPEC member countries

AbstractThis study investigated the impact of natural resources on economic growth among the Organization of the Petroleum Exporting Countries (OPEC) by controlling for institutional quality and financial development during the period 2008–2018. The study applied the recent generalised method of moment estimation method proposed by Kripfganz (2019, Generalized method of moments estimation of linear dynamic panel data models. London Stata Conference, pp. 1–128). The results revealed a negative and significant impact of natural resource rents on economic growth. However, oil rents showed a positive and statistically significant impact on economic growth. Similarly, institutional quality has been found to have positive and significant contribution to economic growth. Finally, financial development has also been found to have positive and significant impact on economic growth of the OPEC member countries.

Environmental aspect of energy transition and urbanization in the OPEC member states.

More than any other nations, the crude oil-exporting countries and especially the Organization of the Petroleum Exporting Countries (OPEC) are likely to experience a more difficult energy-transitioning regime because of the economies' high dependence on crude oil revenue. By using the Pooled Mean Group (PMG) Autoregressive Distributed Lag Models (ARDL) approach, this study examines the impact of the energy transition albeit from conventional to clean energy on carbon emissions in 11 members of the OPEC. While engaging the aforementioned objective, the study further examined the validity of the Environmental Kuznets Curve (EKC) hypothesis amidst urbanization drive among the countries. The result from the long-run estimates shows that fossil fuel utilization exerts a positively significant on environmental degradation in the selected countries, while the observed negative impact of renewable energy utilization and urbanization on carbon dioxide emission (CO2) was insignificant in both the short and long run. The implication is that the current energy transition policy of the OPEC states is not sufficient at driving the states' environmental sustainability agenda. In addition, the EKC was not valid in the panel of the OPEC countries for the period of study, rather a U-shaped relation is established between income level and environmental degradation. Thus, this further posits that there is a setback in the push for environmental quality especially when there is an improvement in economic well-being through income growth in the OPEC states. Moreover, findings from the panel causality test show that there is no causality running from both fossil fuel and renewable energy consumption to the income level among the countries. On the contrary, a uni-directional causality was obtained from income level to renewable energy consumption, while urbanization strongly Granger causes fossil fuel use and CO2 emissions among the countries. As such, it is concluded that energy conservation policies can be implemented to reduce extreme dependence on fossil fuel use with little or no detrimental consequences, thus positioning the countries for economic prosperity in a sustainable environment.

Factors affecting methane emissions in OPEC member countries: does the agricultural production matter?

The aim of this study was to study the factors affecting methane emission in Organization of the Petroleum Exporting Countries (OPEC) member countries. Also, the effect of agricultural production including crop and livestock production on methane emissions is surveyed by employing the environmental Kuznets curve framework. To achieve these goals, a panel data of 11 OPEC member countries were examined over the period of 1995–2012. According to stationary properties of the variables, Hausman test, homogeneity test, cross-sectional dependence test, and co-integration tests, the panel dynamic ordinary least square and error correction model were investigated. The empirical results provided the evidence supporting N-shaped nexus between gross domestic production and methane emission in OPEC member countries. In addition, the results indicated that there is a significant positive relationship between energy consumption and methane emission. Also, results revealed that crop and livestock production have a significant positive effect on methane emission in OPEC member countries. According to the long-run estimated parameters, livestock activities were more likely to cause methane contamination than crop production in agricultural production. The results of this study showed that the OPEC member countries should focus on agricultural crop production instead of livestock production for diversify of their income. Also, a vegetarian diet can have a significant effect on the reduction of the methane emission in OPEC member countries, by decreasing the livestock production demand.

Critical Discourse Analysis of Online Publications Ideology: A Case of Middle Eastern Online Publications

This study assesses the reflection of Middle Eastern media networks on the states and the news concerning the oil crisis and Organization of the Petroleum Exporting Countries (OPEC) conditions. A critical discourse analysis approach is adopted to analyze 22 articles from Al Jazeera and Al Arabiya regarding the Qatar withdrawal from OPEC. The ideological choices vary as Al Jazeera is focused on the Qatar economy, while Al Arabiya on Saudi Arabia. These online publications have presented a positive self-presentation of their funded country while the negative representation of the other. Al Jazeera has pointed that the exit of Qatar from the OPEC is to focus on its other non–oil production sector, while Al Arabiya has pointed that this exit is due to the primary role of Saudi Arabia, with which Qatar has an on-going conflict. Qatar is symbolic to broaden regional division, which may later diffuse to other OPEC members and will leave no mark on the decision-making process of the alliance.

Conditional convergence in energy consumption per capita of OPEC member countries: evidence from non‐linearity tests

AbstractThis paper examines the convergence of energy consumption in Organization of the Petroleum Exporting Countries (OPEC) countries. A new non‐linear unit root test is principally utilized in the convergence analysis. We support the convergence of energy consumption in the OPEC member countries. Convergence of energy consumption is associated with the call for energy conservation policies, in order to improve energy efficiency and reduce global greenhouse emissions.

A dynamic network analysis of the world oil market: Analysis of OPEC and non-OPEC members

We characterize the dynamic network structure of major oil producing countries. We examine the oil production coordination of 13 Organization of the Petroleum Exporting Countries (OPEC) and 17 non-OPEC members. We construct the dynamic network structure using the network connectedness measure of Diebold and Yilmaz (2009). We investigate the structural changes in connectedness of OPEC and non-OPEC members. Additionally, we study how the influence of OPEC members, non-OPEC countries and major oil producers evolve. We find that the network structure of major oil-producing countries changes significantly over time. Specifically, the impact of changes in oil-production of all OPEC members on global oil production declines, whereas the impact of non-OPEC on global oil production increases. OPEC's “increase” decisions have a significant and positive impact on OPEC and non-OPEC coordination. However, “cut” decisions do not affect coordination. We find that OPEC countries and developing countries have significantly higher levels of connectedness. Additionally, countries with high oil production levels have significantly more influence. The empirical results provide intuition about the recent developments in global oil production.

China’s foreign trade policy with OPEC member countries

PurposeThe purpose of this paper is to analyze specifications of the China’s foreign trade policy with Organization of the Petroleum Exporting Countries (OPEC) member countries.Design/methodology/approachThe paper conducts three panel data estimations (fixed effect [FE], random effect [RE] and fully modified ordinary least squares [FMOLS]) based on the gravity model approach for bilateral trade patterns in natural resource and non-natural resource commodities between China and 13 OPEC members over the period of 1998-2014.FindingsThe findings reveal that the gravity equation fits the data reasonably well. The existence of long-term relationships between the bilateral trade flows and the main components of gravity model – GDP, income (GDP per capita), the difference in income, exchange rate, the openness level, distance and WTO membership – through the FE, RE and the FMOLS approaches was confirmed. The estimation results show that the trade pattern between China and OPEC member countries relies on the Heckscher–Ohlin theory, thus being explained by difference in factor endowments such as energy resources and technology.Originality/valueTo the best of the authors’ knowledge, this is the first attempt to examine the China’s foreign trade policy with the OPEC member countries through a gravity trade approach.

The growth-IPRs nexus in OPEC member countries: an empirical investigation

This study employs a parsimonious model of economic growth to investigate the impact of intellectual property rights (IPRs) protection on the economic growth of Organization of the Petroleum Exporting Countries (OPEC) member countries. The growth model is estimated in the context of the Hausman-Taylor estimation technique in an annualized panel data framework. The principal finding suggests that IPRs per se are not an important factor in explaining the economic growth of OPEC member countries. However, the interaction between IPRs and trade has exerted a positive and significant impact on the economic growth of OPEC member countries

Global Warming: Predicting OPEC Carbon Dioxide Emissions from Petroleum Consumption Using Neural Network and Hybrid Cuckoo Search Algorithm.

BackgroundGlobal warming is attracting attention from policy makers due to its impacts such as floods, extreme weather, increases in temperature by 0.7°C, heat waves, storms, etc. These disasters result in loss of human life and billions of dollars in property. Global warming is believed to be caused by the emissions of greenhouse gases due to human activities including the emissions of carbon dioxide (CO2) from petroleum consumption. Limitations of the previous methods of predicting CO2 emissions and lack of work on the prediction of the Organization of the Petroleum Exporting Countries (OPEC) CO2 emissions from petroleum consumption have motivated this research.Methods/FindingsThe OPEC CO2 emissions data were collected from the Energy Information Administration. Artificial Neural Network (ANN) adaptability and performance motivated its choice for this study. To improve effectiveness of the ANN, the cuckoo search algorithm was hybridised with accelerated particle swarm optimisation for training the ANN to build a model for the prediction of OPEC CO2 emissions. The proposed model predicts OPEC CO2 emissions for 3, 6, 9, 12 and 16 years with an improved accuracy and speed over the state-of-the-art methods.ConclusionAn accurate prediction of OPEC CO2 emissions can serve as a reference point for propagating the reorganisation of economic development in OPEC member countries with the view of reducing CO2 emissions to Kyoto benchmarks—hence, reducing global warming. The policy implications are discussed in the paper.

Energy efficiency in OPEC member countries: analysis of historical trends through the energy coefficient approach

AbstractPeriod‐wise energy coefficients for members of the Organization of the Petroleum Exporting Countries (OPEC) were calculated, showing diverse behaviour among them. Behaviour of aggregate OPEC coefficients reflects the general trend among its member nations. Acceleration of transportation fuel demand fuelled high intensities in the mid‐1970s. An overall economic downturn in the 1980s did not dampen demand growth, but in fact accelerated in the industrial and household, public and commercial (HPC) sectors, thus keeping energy coefficients above 1. Energy coefficients were headed towards unity in the 1990s, before finally settling under 1 in the 2000s. We caution from interpreting these developments as improvements in efficiency, as OPEC member countries have not become ‘post‐industrial’ as more value‐added industries, infrastructure development and stability encourage consumption. Electricity coefficients can be used as a proxy for consumer behavioural efficiency, as the HPC sector is its largest consumer. After the 1990s, almost all OPEC member countries had higher electricity coefficients than energy ones, due to reasons spanning from higher urbanisation and population growth rates, to low electricity prices. This suggests that electricity use in the industrial and HPC sectors will be a major driver of future demand growth for those countries, especially as their service sector grows and their economies diversify.

Post-2012 CDM multi-criteria analysis of industries in six Asian countries: Iranian case study

The prospects of the Clean Development Mechanism (CDM) and for carbon income, up to and beyond 2012, in the industrial sectors of Iran and five other Asian countries are investigated. The attractiveness and suitability of each host country, the status of their industrial sectors (based on four post-2012 scenarios), and the post-2012 potential of the CDM (or similar carbon projects) in these sectors are all examined. A multi-criteria analysis of Iran, Saudi Arabia, the UAE, Qatar, China, and India, based on seven sets of criteria (institutional, regulatory, economic, political, social, CDM experience, and energy production/consumption), is conducted, and the post-2012 potential carbon incomes of each country – based on CO2e emissions of industrial processes – are calculated. Finally, the Iranian industrial sector and the impact of deregulation of energy prices are examined. The post-2012 potential savings in the Iranian industrial sector are calculated based on energy savings, carbon income, and environmental savings. The results indicate that there is strong demand for investment and new technology in this sector to combat several-fold energy price increases. Moreover, high-priced carbon credits could play a meaningful role in post-2012 energy policies in this sector. Policy relevance This research is the first study to quantify the carbon market potentials in the industrial sectors of the selected Organization of the Petroleum Exporting Countries (OPEC) members. The Kyoto Protocol is considered by most OPEC countries to be a mixed bag of threats and opportunities and they have shown ambivalence towards it, mainly due to the threat a reduction of fossil fuel consumption poses to their economies. On the other hand, energy efficiency is a desirable goal for their industrial sectors. Iran, as an OPEC member country with vast energy resources, has mostly ignored the CDM during the first commitment period of the Kyoto Protocol and has performed poorly on CDM implementation. However, the current deregulation of energy prices in Iran, with profound cuts in energy subsidies, would definitely alter the perspective of its industrial decision makers on the post-2012 carbon potentials.

Africa's oil: potential and implications

AbstractOn 1 January 2007, the Republic of Angola officially joined the Organization of the Petroleum Exporting Countries (OPEC). Luanda's accession is the first change in the organization's membership in more than three decades. This significant development demonstrates Africa's growing contribution to the overall global energy security. This study examines the oil outlook of the major producers in the continent: Nigeria, Angola and Sudan. It also analyses the growing interdependence between major oil consuming nations (the United States, China and the European Union) and African producers. The contention is that increasing production from Africa and consolidating partnership with OPEC Members will contribute to global energy security and further enhance cooperation between producers and consumers.

97/00169 World oil and geopolitics to the year 2010

This paper focuses on the interplay of market forces and politics in the world oil market projected to the year 2010. It argues that world oil demand will increase considerably, with Asian demand growing the fastest. Given that the growth of oil supply of producers outside the Organization of the Petroleum Exporting Countries (OPEC) will be trivial, the call on OPEC oil will increase substantially. Yet, given their declining per-capita oil revenues, OPEC members may not be able to make timely investments in required upstream projects. If this happens, the supply constraint will lead to higher prices and intensified international competition for Arabian/Persian Gulf oil. Thus, foreign investment will be needed increasingly in OPEC states if prices are to remain stable. But geopolitical and institutional barriers to foreign investment in many OPEC members hinder foreign investment. It is imperative that major players in the world oil market cooperate to reduce such barriers in time to ensure that supply corresponds to rising demand. 22 refs., 8 figs., 10 tabs.