OIL PRICE FLUCTUATIONS AND ITS ECONOMIC IMPACT ON OMAN

Authors: Al Mayasa Mohammed Sulaiman Al Nuaimi, Yaqeen Hamdan Ali Al Mazroui & Dr. Mercy Toni

ABSTRACT

Without a doubt, the economy is significantly impacted by changes in oil prices. Our study on oil price fluctuations focused in particular on the impact of oil price volatility on the economy. As discussed in the literature review section, the majority of studies indicate that there    is    a    negative    association    between    oil    prices    and    economic    growth. The Sultanate of Oman, in particular, is one of the oil-producing nations that uses large oil resources, which are the most crucial resource in the budget and, as a result, which numerous factors, such as the world’s supply and demand as well as natural catastrophes, have an impact on oil prices. OPEC’s decisions about how to evaluate these factors provide insight into price volatility and expectations.

In this study, we investigate the connection between the Sultanate of Oman’s GDP and oil prices. The information gathered spans 20 of years, from 1970 to 2022.he result of our comprehensive research reveals a complex relationship between Omani’s economic indicators and oil prices, creating an engaging story about the complexities of the Oman economy. Our methodology, which includes panel data regression, correlation analysis, and comprehensive data analysis, provided key insights into the complex dynamics of this connection.

The continuing positive relationship between oil prices and economic indicators in the Sultanate of Oman highlights and amplifies the country’s vulnerability to the volatile nature of oil price fluctuations. Oman is directly affected because it is a large oil exporter, as evidenced by the noticeable impact on GDP growth rates and government revenues. The volatile fluctuations in the global oil market are intricately intertwined with Oman’s economic fabric.

Keywords: Oil, Oil price, Oil price fluctuations, GDP growth, GDP per capita& economic growth

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