The Impact of Economic Sanctions and War-Related Uncertainty on Oil Market Volatility: Evidence from the Russia-Ukraine War
Imlak Shaikh et al.
What the paper says
Economic sanctions engender the disturbance of financial transactions between the sanctioner and the targeted nations. The Russia-Ukraine war also restricted Russia's entry into financial and commodity markets, with reverberating effects on the global market. Hence, the study aims to elucidate the relationship between armed conflicts and economic sanctions enforced by the G7 nations, the crude oil market, and its corresponding volatility index, OVX. It seems that heightened levels of ambiguity, conflict, nervousness, and hostility have contributed to an increase in the fluctuation of the energy market, leading to an extreme response to economic sanctions. Our findings reveal that financial restrictions imposed by Australia, Japan, the UK, and the USA have led to higher uncertainty and increased volatility in the oil market. The news variable War exhibits higher volatility compared to Crude oil and Recession in the media press. The war-induced uncertainty has shown a significant impact on the oil volatility.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.