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Oil Prices, Domestic Resource Gaps, and Breakeven Oil Prices in the Oil-Exporting Countries

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  • Alqahtani Abdullah Saeed S

    (School of Economics, Huazhong University of Science and Technology, Luoyu road, Wuhan, China)

  • Ouyang Hongbing

    (School of Economics, Huazhong University of Science and Technology, Luoyu road, Wuhan, China)

  • Ali Adam

    (School of Economics, Huazhong University of Science and Technology, Luoyu road, Wuhan, China)

  • Saleh Shayem

    (School of Economics, Huazhong University of Science and Technology, Luoyu road, Wuhan, China)

Abstract

This paper analyzes the economic impact of the oil prices, the domestic resource gaps, and the fiscal and external breakeven oil prices on the oil exporting countries (OECs). Specifically, this paper aims to examine the empirical behaviors of the oil prices, the domestic resource gaps, and the fiscal and external breakeven oil prices along with their influence on the economy of Saudi Arabia in order to determine the oil-economic gain/loss (OEG/L) and its influences on the Saudi Arabia economy over the period of 2008 to 2018. This study uses exploratory research design, with both linear and nonlinear regression models. This paper finds the oil prices, the domestic resources gaps, and the fiscal and external breakeven oil prices exert significant influences on the economic growth in Saudi Arabia. In addition, the fiscal breakeven oil price is considerably high in Saudi Arabia and has a marginal OEG/L of USD 2.3582 per barrel. Moreover, it is observed that the oil price has an irregular and unpredictable movement behavior and co-moved with the domestic resource gaps in Saudi Arabia. The findings implies that the economy diversification in Saudi Arabia could be achieved by setting policy on improving non-oil sectors and encouraging private sector involvement.

Suggested Citation

  • Alqahtani Abdullah Saeed S & Ouyang Hongbing & Ali Adam & Saleh Shayem, 2018. "Oil Prices, Domestic Resource Gaps, and Breakeven Oil Prices in the Oil-Exporting Countries," Economics, Sciendo, vol. 6(2), pages 9-26, December.
    • Handle: RePEc:vrs:econom:v:6:y:2018:i:2:p:9-26:n:4
    DOI: 10.2478/eoik-2018-0023
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    References listed on IDEAS

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    More about this item

    Keywords

    oil prices; economic impact; domestic resource gaps; fiscal breakeven; external breakeven;
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General

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