IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v128y2018icp304-310.html
   My bibliography  Save this article

Oil prices, socio-political destabilization risks, and future energy technologies

Author

Listed:
  • Korotayev, Andrey
  • Bilyuga, Stanislav
  • Belalov, Ilya
  • Goldstone, Jack

Abstract

Our review of some modern trends in the development of energy technologies suggests that the scenario of a significant reduction of the global oil demand can be regarded as quite probable. Such a scenario implies a rather significant decline of oil prices. The aim of this article is to estimate the sociopolitical destabilization risks that such a decline could produce with respect to oil exporting economies. Our analysis of the relationship between changes in oil prices and political crises in these economies shows a large destabilizing effect for price declines in the respective countries. The effect is highly non-linear, showing a power-law type relationship: oil price changes in the range higher than $60 per barrel only exert very slight influence on sociopolitical instability, but if prices fall below this level, each further decrease by $10 leads to a greater increase in the risks of crises. These risks grow particularly sharply at a prolonged oil price collapse below $40 per barrel, and become especially high at a prolonged oil price collapse below $35 per barrel. The analysis also reveals a fairly short-term lag structure: a strong steady drop in oil prices immediately leads to a marked increase in the risks of sociopolitical destabilization in oil-exporting countries, and this risk reaches critical highs within three years. Thus, the possible substantial decline of the global oil demand as a result of the development of the energy technologies reviewed in the first section of the present article could lead to a very substantial increase in the sociopolitical destabilization risks within the oil exporting economies. This suggests that the governments, civil societies, and business communities of the respective countries should amplify their effort aimed at the diversification of their economies and the reduction of their dependence on the oil exports.

Suggested Citation

  • Korotayev, Andrey & Bilyuga, Stanislav & Belalov, Ilya & Goldstone, Jack, 2018. "Oil prices, socio-political destabilization risks, and future energy technologies," Technological Forecasting and Social Change, Elsevier, vol. 128(C), pages 304-310.
    • Handle: RePEc:eee:tefoso:v:128:y:2018:i:c:p:304-310
    DOI: 10.1016/j.techfore.2017.06.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162517307011
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2017.06.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Macartan Humphreys, 2005. "Natural Resources, Conflict, and Conflict Resolution," Journal of Conflict Resolution, Peace Science Society (International), vol. 49(4), pages 508-537, August.
    2. Anca M. Cotet & Kevin K. Tsui, 2013. "Oil and Conflict: What Does the Cross Country Evidence Really Show?," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(1), pages 49-80, January.
    3. Fearon, James D. & Laitin, David D., 2003. "Ethnicity, Insurgency, and Civil War," American Political Science Review, Cambridge University Press, vol. 97(1), pages 75-90, February.
    4. Eleonora Nillesen & Erwin Bulte, 2014. "Natural Resources and Violent Conflict," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 69-83, October.
    5. Colgan, Jeff D., 2010. "Oil and Revolutionary Governments: Fuel for International Conflict," International Organization, Cambridge University Press, vol. 64(4), pages 661-694, October.
    6. Paul Collier & Anke Hoeffler, 2004. "Greed and grievance in civil war," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 563-595, October.
    7. Khatib, Hisham & Difiglio, Carmine, 2016. "Economics of nuclear and renewables," Energy Policy, Elsevier, vol. 96(C), pages 740-750.
    8. Michael L. Ross, 2004. "What Do We Know about Natural Resources and Civil War?," Journal of Peace Research, Peace Research Institute Oslo, vol. 41(3), pages 337-356, May.
    9. Ross, Michael L., 2004. "How Do Natural Resources Influence Civil War? Evidence from Thirteen Cases," International Organization, Cambridge University Press, vol. 58(1), pages 35-67, February.
    10. Pahle, Michael & Pachauri, Shonali & Steinbacher, Karoline, 2016. "Can the Green Economy deliver it all? Experiences of renewable energy policies with socio-economic objectives," Applied Energy, Elsevier, vol. 179(C), pages 1331-1341.
    11. Hall, Charles A.S. & Lambert, Jessica G. & Balogh, Stephen B., 2014. "EROI of different fuels and the implications for society," Energy Policy, Elsevier, vol. 64(C), pages 141-152.
    12. Hanne Fjelde, 2009. "Buying Peace? Oil Wealth, Corruption and Civil War, 1985—99," Journal of Peace Research, Peace Research Institute Oslo, vol. 46(2), pages 199-218, March.
    13. Hedegaard, Karsten & Ravn, Hans & Juul, Nina & Meibom, Peter, 2012. "Effects of electric vehicles on power systems in Northern Europe," Energy, Elsevier, vol. 48(1), pages 356-368.
    14. James D. Fearon, 2005. "Primary Commodity Exports and Civil War," Journal of Conflict Resolution, Peace Science Society (International), vol. 49(4), pages 483-507, August.
    15. Viebahn, Peter & Soukup, Ole & Samadi, Sascha & Teubler, Jens & Wiesen, Klaus & Ritthoff, Michael, 2015. "Assessing the need for critical minerals to shift the German energy system towards a high proportion of renewables," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 655-671.
    16. Indra De Soysa & Eric Neumayer, 2007. "Resource Wealth and the Risk of Civil War Onset: Results from a New Dataset of Natural Resource Rents, 1970—1999," Conflict Management and Peace Science, Peace Science Society (International), vol. 24(3), pages 201-218, July.
    17. Jacobson, Mark Z. & Delucchi, Mark A., 2011. "Providing all global energy with wind, water, and solar power, Part I: Technologies, energy resources, quantities and areas of infrastructure, and materials," Energy Policy, Elsevier, vol. 39(3), pages 1154-1169, March.
    18. Paivi Lujala, 2010. "The spoils of nature: Armed civil conflict and rebel access to natural resources," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(1), pages 15-28, January.
    19. Darmani, Anna & Arvidsson, Niklas & Hidalgo, Antonio & Albors, Jose., 2014. "What drives the development of renewable energy technologies? Toward a typology for the systemic drivers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 834-847.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Quentin Plantec & Pascal Le Masson & Benoit Weil, 2020. "Impact of knowledge search practices on the originality of inventions: a study in the oil & gas industry," Post-Print hal-02613665, HAL.
    2. Ivanovski, Kris & Hailemariam, Abebe, 2022. "Time-varying geopolitical risk and oil prices," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 206-221.
    3. Zhang, Lei & Chen, Yan & Bouri, Elie, 2024. "Time-varying jump intensity and volatility forecasting of crude oil returns," Energy Economics, Elsevier, vol. 129(C).
    4. Angelidou, M. & Politis, C. & Panori, A. & Bakratsas, T. & Fellnhofer, K., 2022. "Emerging smart city, transport and energy trends in urban settings: Results of a pan-European foresight exercise with 120 experts," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    5. Plantec, Quentin & Le Masson, Pascal & Weil, Benoît, 2021. "Impact of knowledge search practices on the originality of inventions: A study in the oil & gas industry through dynamic patent analysis," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    6. Salisu, Afees A. & Isah, Kazeem & Oloko, Tirimisiyu O., 2024. "Technology shocks and crude oil market connection: The role of climate change," Energy Economics, Elsevier, vol. 130(C).
    7. Wang, Jun-Zhuo & Feng, Gen-Fu & Yin, Hua-Tang & Chang, Chun-Ping, 2023. "Toward sustainable development: Does the rising oil price stimulate innovation in climate change mitigation technologies?," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 569-583.
    8. Hu, Jinyan & Wang, Kai-Hua & Su, Chi Wei & Umar, Muhammad, 2022. "Oil price, green innovation and institutional pressure: A China's perspective," Resources Policy, Elsevier, vol. 78(C).
    9. Gong, Xiao-Li & Feng, Yong-Kang & Liu, Jian-Min & Xiong, Xiong, 2023. "Study on international energy market and geopolitical risk contagion based on complex network," Resources Policy, Elsevier, vol. 82(C).
    10. He, Zhifang & Sun, Hao, 2024. "The time-varying and asymmetric impacts of oil price shocks on geopolitical risk," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 942-957.
    11. Walter Leal Filho & Richard Kotter & Pinar Gökçin Özuyar & Ismaila Rimi Abubakar & João Henrique Paulino Pires Eustachio & Newton R. Matandirotya, 2023. "Understanding Rare Earth Elements as Critical Raw Materials," Sustainability, MDPI, vol. 15(3), pages 1-18, January.
    12. Pavleska, Marija & Kerr, William A., 2020. "Linking investment decisions and future food security to the regulation of genetic-based technologies," Technological Forecasting and Social Change, Elsevier, vol. 153(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bodea, Cristina & Higashijima, Masaaki & Singh, Raju Jan, 2016. "Oil and Civil Conflict: Can Public Spending Have a Mitigation Effect?," World Development, Elsevier, vol. 78(C), pages 1-12.
    2. Vusal Musayev, 2016. "Externalities in Military Spending and Growth: The Role of Natural Resources as a Channel through Conflict," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(3), pages 378-391, June.
    3. Morelli, Massimo & Rohner, Dominic, 2015. "Resource concentration and civil wars," Journal of Development Economics, Elsevier, vol. 117(C), pages 32-47.
    4. Stoop, Nik & Verpoorten, Marijke & van der Windt, Peter, 2019. "Artisanal or industrial conflict minerals? Evidence from Eastern Congo," World Development, Elsevier, vol. 122(C), pages 660-674.
    5. Arinze Nwokolo, 2018. "Oil Price Shocks and Civil Conflict: Evidence from Nigeria," HiCN Working Papers 274, Households in Conflict Network.
    6. Ajide, Kazeem Bello & Alimi, Olorunfemi Yasiru, 2021. "Environmental impact of natural resources on terrorism in Africa," Resources Policy, Elsevier, vol. 73(C).
    7. Issifou, Ismael, 2017. "Can migration reduce civil conflicts as an antidote to rent-seeking?," Economic Systems, Elsevier, vol. 41(3), pages 333-353.
    8. Camille Laville, 2018. "The econometrical causal analysis of internal conflicts: The evolutions of a growing literature [L’analyse économétrique des conflits internes par l’approche causale : les évolutions d’une littérat," Working Papers hal-01940461, HAL.
    9. Farzanegan, Mohammad Reza & Lessmann, Christian & Markwardt, Gunther, 2018. "Natural resource rents and internal conflicts: Can decentralization lift the curse?," Economic Systems, Elsevier, vol. 42(2), pages 186-205.
    10. Yu, Jiangli & Wang, Shuo & Yang, Wantong, 2023. "Natural resources governance and geopolitical risks: A literature review and bibliometric analysis," Resources Policy, Elsevier, vol. 86(PA).
    11. Raul Caruso & Jon Echevarria-Coco, 2023. "International prices and continuing conflict: Theory and evidence from sub-Saharan Africa (1980–2017)," Journal of Peace Research, Peace Research Institute Oslo, vol. 60(6), pages 889-905, November.
    12. Nemera Gebeyehu Mamo, 2018. "Essays on natural resources in Africa: local economic development, multi-ethnic coalitions and armed conflict," Economics PhD Theses 0518, Department of Economics, University of Sussex Business School.
    13. Sini, Snow & Abdul-Rahim, A.S. & Sulaiman, Chindo, 2021. "Does natural resource influence conflict in Africa? Evidence from panel nonlinear relationship," Resources Policy, Elsevier, vol. 74(C).
    14. Wegenast, Tim, 2013. "The Impact of Fuel Ownership on Intrastate Violence," GIGA Working Papers 225, GIGA German Institute of Global and Area Studies.
    15. Kjetil Bjorvatn & Alireza Naghavi, 2010. "Rent seekers in rentier states: When greed brings peace," Center for Economic Research (RECent) 039, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    16. Maystadt, Jean-François & Trinh Tan, Jean-François & Breisinger, Clemens, 2014. "Does food security matter for transition in Arab countries?," Food Policy, Elsevier, vol. 46(C), pages 106-115.
    17. van der Ploeg, Frederick & Rohner, Dominic, 2012. "War and natural resource exploitation," European Economic Review, Elsevier, vol. 56(8), pages 1714-1729.
    18. Axel Dreher & Merle Kreibaum, 2016. "Weapons of choice," Journal of Peace Research, Peace Research Institute Oslo, vol. 53(4), pages 539-553, July.
    19. Nicolas Berman & Mathieu Couttenier & Dominic Rohner & Mathias Thoenig, 2017. "This Mine Is Mine! How Minerals Fuel Conflicts in Africa," American Economic Review, American Economic Association, vol. 107(6), pages 1564-1610, June.
    20. Wegenast, Tim, 2010. "Inclusive Institutions and the Onset of Internal Conflict in Resource-rich Countries," GIGA Working Papers 126, GIGA German Institute of Global and Area Studies.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:128:y:2018:i:c:p:304-310. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.