Global oil risk price management in Iran and Russia
https://doi.org/10.26425/2309-3633-2021-9-2-33-45
Abstract
Oil is one of the most important sources of income for oil-exporting countries such as the Russian Federation and Iran, as well as the main raw material in the production process in oil-importing countries. Risks fluctuations in world oil prices can cause sovereign financial risks of instability in macroeconomic variables in both groups of oil exporting and importing countries. Negative shocks in world oil prices for countries such as Iran and Russia, whose economic structure is oriented towards oil and provides a significant part of the state budget through oil, could have significant consequences for the economies of these countries. Such fluctuations not only affect the economies of oil-importing countries, but are also one of the main causes of disruptions in the economies of oil-exporting countries. This study examines the government's management of risk fluctuations in world oil prices and its actions in Iran and Russia. The results of this study show that Iran and Russia, as sanctioned countries and oil exporters, have taken various measures to deal with these shocks, the most important of which is the creation of sovereign wealth funds in the two countries. In this article, the characteristics of national development funds in Iran and Russia are compared. The differences between Iran and Russia in risk management and the structure of these funds are shown.
About the Author
S. Alikhani
Plekhanov Russian University of Economics
Russian Federation
Russian Federation
Samira Alikhani, Postgraduate student
36, Stremyannyi per., Moscow 117997
References
1. Baumeister C., Peersman G. and van Robays I. (2010), The economic consequences of oil shocks: differences across countries and time, In R. Fry, S. Jones, & M. Kent (Eds.), Inflation in an Era of Relative Price Shocks, Sydney, Australia, pp. 91–128.
2. Baumeister C. and Hamilton J.D. (2019), “Structural interpretation of vector autoregressions with incomplete identification: revisiting the role of oil supply and demand shocks”, American Economic Review, vol. 109, no. 5, pp. 1873–1910. https://doi.org/10.1257/aer.20151569
3. Bacon R. and Silvana T. (2006), Experiences with Oil Funds: Institutional and Financial Aspects, Energy and Water Department, World Bank, Report 321/06, Washington, DC, 281 p.
4. Calderon C. and Zeufack A.G. (2020), Borrow with sorrow? The changing risk profile of Sub-Saharan Africa’s debt, World Bank. Available at: https://bit.ly/34WjzBq (accessed 06.04.2021). https://doi.org/10.1596/1813-9450-9137
5. Cunado J. and de Gracia F.P. (2003), “Do oil price shocks matter? Evidence for some European countries”, Energy Economics, vol. 25, issue 2, March, pp. 137–154. https://doi.org/10.1016/S0140-9883(02)00099-3
6. Cunado J. and Perez de Gracia F.P. (2005), “Oil prices, economic activity and inflation: evidence for some Asian countries”, The Quarterly Review of Economics and Finance, vol. 45, issue 1, pp. 65–83.
7. Cunado J., Jo S., and de Gracia F.P. (2015), “Macroeconomic impacts of oil price shocks in Asian economies”, Energy Policy, vol. 86, Nov., pp. 867–879. https://doi.org/10.1016/j.enpol.2015.05.004
8. Farzanegan M. and Markwardt G. (2007), “The effect of oil price shocks on Iranian economy”, Energy Economics, vol. 31, issue 1, Jan., pp. 134–151. https://doi.org/10.1016/j.eneco.2008.09.003
9. Gylfason T. (2001), “Natural resources, education and economic development”, European Economic Review, vol. 45, issue 4–6, May, pp. 847–859. https://doi.org/10.1016/S0014-2921(01)00127-1
10. Hamilton J.D. (2011), “Nonlinearities and the macroeconomic effects of oil prices”, Macroeconomic Dynamics, vol. 15 (S3), pp. 364–378. https://doi.org/10.1017/S1365100511000307
11. Herrera A.M., Lagalo L.G. and Wada T. (2011), “Oil price shocks and industrial production: is the relationship linear?”, Macroeconomic Dynamics, vol. 15 (S3), pp. 472–497. https://doi.org/10.1017/S1365100511000290
12. Herrera A.M., Lagalo L.G. and Wada T. (2015), “Asymmetries in the response of economic activity to oil price increases and decreases?”, Journal of International Money and Finance, vol. 50, Feb., pp. 108–133. https://doi.org/10.2139/ssrn.1782878
13. Kang W. and Ratti R.A. (2013), “Structural oil price shocks and policy uncertainty”, Economic Modeling, vol. 35, Sep., pp. 314–319. https://doi.org/10.1016/j.econmod.2013.07.025
14. Khominich I. and Savvina O. (2018). “Sovereign wealth funds of Russia and Norwey: Comparative characteristics”, Banking Services, no. 8, pp. 2–8. (In Russian).
15. Kilian L. (2009), “Not all oil price shocks are alike: disentangling demand and supply shocks in the crude oil market”, American Economic Review, vol. 99, no. 3, June, pp. 1053–1069. https://doi.org/10.1257/aer.99.3.1053
16. Kilian L. and Vigfusson R.J. (2011), “Nonlinearities in the oil price-output relationship”, Macroeconomic Dynamics, vol. 15 (S3), pp. 337–363. https://doi.org/10.2139/ssrn.1782878
17. Knill A.M., Lee B.S. and Mauck N. (2012), “Sovereign wealth fund investment and the return-to-risk performance of target firms”, Journal of Financial Intermediation, 2012. vol. 21, no. 2, Apr., Pp. 315–340. https://doi.org/10.1016/j.jfi.2011.10.001
18. Nikonova S.A., Kalugina Z.D. and Tamindarova Z.R. (2019), “Market analysis of oil production and refining in Russia”, Azimuth of Scientific Research: Economics and Administration, no. 2 (27), pp. 271–275. (In Russian). https://doi.org/10.26140/anie-2019-0802-0066
19. Sachs J.D. and Warner A. (1997), Natural resource abundance and economic growth, Working Paper5390, Center for International Development and Harvard University, Cambridge, UK; Massachusets, USA. https://doi.org/10.3386/w5398
Review
For citations:
Alikhani S. Global oil risk price management in Iran and Russia. UPRAVLENIE / MANAGEMENT (Russia). 2021;9(2):33-45. (In Russ.) https://doi.org/10.26425/2309-3633-2021-9-2-33-45
Views:
554
Email this article 