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US partisan conflict, Sino-US political relation news, and oil market dynamics

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  • Cai, Yifei
  • Saadaoui, Jamel
  • Uddin, Gazi Salah

Abstract

This study analyzes the effects of US partisan conflict and US-China political relation news shocks on the oil market. A shock to partisan conflict leads to a drop in the political relations news index, a decrease in oil demand, and an increase in oil prices. When the political relations news index rises, it significantly reduces oil demand and prices, with only minor effects on oil supply. The study also finds that negative political news shocks have a more significant impact on the oil market compared to positive news shocks, leading to lower oil prices and demand. These findings suggest important policy considerations for managing the impacts of political news on the oil market.

Suggested Citation

  • Cai, Yifei & Saadaoui, Jamel & Uddin, Gazi Salah, 2025. "US partisan conflict, Sino-US political relation news, and oil market dynamics," Energy Economics, Elsevier, vol. 149(C).
  • Handle: RePEc:eee:eneeco:v:149:y:2025:i:c:s0140988325006474
    DOI: 10.1016/j.eneco.2025.108820
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    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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