Kapsarc – Do Rising and Falling Oil Prices Affect Non-Oil Trade Balance Equally?

The main theme of the study is to examine the impact of changes in oil prices on the non-oil trade balance in four major OPEC economies: Saudi Arabia, Kuwait, Nigeria, and Venezuela from 1982 to 2022.

The study found that a 1% increase in oil prices leads to a 1.02% reduction in the non-oil trade balance, while a 1% decrease in oil prices improves it by 0.95%. The results indicate that the impact of rising and falling oil prices on the non-oil trade balance is not symmetrical, highlighting the importance of statistical testing to verify symmetry or asymmetry. Country-level analysis revealed significant heterogeneity among the four economies, with Saudi Arabia showing average sensitivity to oil price changes.