Impact of international trade on crude oil in political unstable economies: Evidence from quantile regression

The current study examined the relationship between crude oil and political stability. The study relied on the global crude oil network from 2000 to 2020 for 100 countries. The underlying premise is that oil dependence can lead to political instability. We distinguish between two types of oil dependence: economic dependence, which occurs when crude oil is the primary source of income, and energy dependence, which occurs when oil dominates a country's energy mix. In the second case, countries that rely on oil imports to meet domestic oil demand are much more reliant on energy sources and, as a result, are indirectly exposed to the instability of oil-exporting nations. Using a simultaneous quantile regression approach and the concepts of out-degree and in-degree centrality, the empirical results show that reliance on oil for both economic and energy needs can be dangerous to internal stability. The findings support the resource curse hypothesis for both oil-exporting and oil-importing countries. The latter import political unrest alongside oil, especially when crude oil is primarily used to meet their energy needs.