Unveiling the impact of geopolitical conflict on oil prices: A case study of the Russia-Ukraine War and its channels

The Russia-Ukraine War, which has lasted for over a year, has been proven to significantly impact crude oil prices. This article aims to explore the channels through which the Russia-Ukraine War affects crude oil prices and to assist decision-makers in channel intervention to mitigate the impact of the war. To this end, the study proposes a research method called Compare Real Data with Predicted Data and Match Influencing Factors (CRP-MIF). The method reveals that the Russia-Ukraine War, through its impact on speculative activities, inventory, and supply-demand balance, combined with production announcements of Organization of the Petroleum Exporting Countries (OPEC), led to sharp short-term fluctuations in international oil prices and rapid price increases. Among these channels, speculative activities, inventory, and supply have a substantial impact. Relevant entities can weaken the impact of the war on oil prices and macroeconomic factors by intervening in these transmission channels. This study provides a new reference paradigm for studying the impact channels of major crisis events on commodity prices.

Automated summary

This article introduces a research method called CRP-MIF, which compares real data with predicted data and matches influencing factors, to explore the channels through which the Russia-Ukraine War affects crude oil prices. It provides insights for decision-makers to intervene and mitigate the impact on oil prices.