GRM 2010 GRM 2011

Abstract Details

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Title of Paper:
Determinants of world crude oil imports- a panel data approach
Paper Proposal Text :

Crude oil is a main resource for world energy supply. It represent about one third of world energy mix. Recently, shale revolution has appeared to threat world demand for conventional oil, especially that most of unconventional resources are located in oil importing countries, as US and China.
GCC is considered a key exporting region, with a share equals 31.5% of total world crude oil exports. GCC main exports destines are Asia, US, Europe with 70%, 18%,10% share of the region's total exports, respectively. Hence, GCC crude oil total exports are expected to be affected with any potential develops may influence these region's imports of crude oil. One of probable developments is domestic production of equivalent alternative resources in importing countries. However, economic growth, changes in economy structure and following energy efficiency policies may affect world imports of crude oil.
US was considered as the world’s largest importer of crude oil with a share exceeding 20% of world imports, equivalent to 9.5 mmbbl/d, no long until shale oil revolution has raised, enabling U.S. to reduce its dependence on imported crude oil. On the other hand, China's increasingly growth has compensated decreases in US imports during last five years. However, portion of its growing crude oil imports since last six months, has been for the purpose of building up strategic reserves, while imports for consumption have been declined due to economic slowdown. Thus, a negative impact on china's crude oil imports may come out, in case slowdown is continued and building up reserves came to end. In addition, a potential shale revolution in China may support negative pressures on its crude oil imports, which would be reflected on GCC total exports.
The objective of this paper is to determine factors affecting world crude oil imports, by testing the impact of four main factors, which are, domestic production of oil and gas (including conventional and unconventional resources), industry value added of GDP (as a measure of economy structure), GDP per capita (as a measure of economic growth), and energy intensity (as a measure of energy conservation), for two importing country groups, developed economies (including US, Europe, Japan), and emerging economies (including China and India). Whereas, both groups represent main importing countries from GCC. Achieving this object will depend on VAR panel model, for annual data during the period between 1980 to 2015. In addition, Impulse response function will be applied to estimate the effect of a potential shock in each variable on crude oil imports, then develop different potential scenarios regarding total world crude oil imports and its effects on GCC exports.
This paper will be organized as follow, first, analyzing developments and impacts of each proposed factor on world imports, Second, present the econometric methodology for modeling each of country groups imports of crude oil, third, explain empirical results, fourth, applying impulse response and analyze different potential scenarios, and finally, concluding marks.