The volatility of the oil price and its consequences on exporting countries

Abstract

Oil is one of the most important energy resources in the world and is known for large price fluctuations with significant effects on global economic activity. In fact, the last fluctuation in the price of oil, which began in June 2014, worsened in early 2016, resulting in a drop of about 70% in the price of a barrel of oil. The vulnerability of importing and exporting countries to the high volatility of oil prices makes this resource a strategic determinant of economic conditions in the oil market.

Therefore, this study will deal with the volatility of the price of oil and its consequences for the exporting countries, firstly by making a historical overview to then present the economic situation of oil markets and the volatility of oil prices. Secondly, the focus is on changing the economic structure and decision-making power in the oil market by analyzing the causes, consequences and policies adopted by the oil market players following the sharp fall in prices in 2014. Finally, an analysis of the impacts of this fall in prices will be studied for exporting countries according to the degree of vulnerability of their economies and the dependence of their fiscal accounts on oil.