Work

US partisan conflict, Sino-US political relation news, and oil market dynamics

Year: 2025

Type: article

Abstract: This study analyzes the effects of US partisan conflict and US-China political relation news shocks on the oil market. A shock to partisan conflict leads to a drop in the political relations news index, a decrease in oil demand, and an increase in oil prices. When the political relations news index rises, it significantly reduces oil demand and prices, with only minor effects on oil supply. The study also finds that negative political news shocks have a more significant impact on the oil market compared to positive news shocks, leading to lower oil prices and demand. These findings suggest important policy considerations for managing the impacts of political news on the oil market. • Partisan conflict increases US-China tensions, and then, we find a decrease in oil demand and an increase in oil prices. • A better geopolitical relation between the US and China reduces oil demand and prices. • A reduction in bad political news has a more significant impact on the oil market compared with an increase in good news. • Political news relative to the US-China relation significantly shapes oil demand, supply, and price dynamics.

Source: Energy Economics

DOI: 10.1016/j.eneco.2025.108820

Authors: Yifei Cai, Jamel Saadaoui, Gazi Salah Uddin

Institutions: University of South Australia, Wuchang University of Technology, Université Paris 8, Linköping University, Norwegian University of Life Sciences

Language: English

Topic: Market Dynamics and Volatility

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $4,280