@TechReport{CEPII:2022-07,
author={Yifei Cai and Valérie Mignon and Jamel Saadaoui},
title={Not all political relation shocks are alike: Assessing the impacts of US-China tensions on the oil market},
year=2022,
month=August,
institution={CEPII},
type={Working Papers},
url={http://www.cepii.fr/CEPII/fr/publications/wp/abstract.asp?NoDoc=13446},
number={2022-07},
abstract={
This paper assesses the effects of US-China political tensions on the oil market. Relying on a quantitative measure of these relationships, we investigate how their dynamics impact oil demand, supply, and prices over various periods, starting from 1971 to 2019. To this end, we estimate a structural vector autoregressive model as well as local projections and show that political tensions between the two countries pull down oil demand and raise supply at medium- and long-run horizons. Overall, our findings show that conflicting relationships between these two major players in the oil market may have crucial impacts, such as the development of new strategic partnerships.
},
keywords={China ; Oil market ; Political relations}
}