The Impact of Sharp Fluctuations in Global Crude Petroleum Prices on the World Economy

Sudden changes in global energy markets have a significant impact on the global economy. International crude petroleum prices are linked to many factors, a key one being the interaction of supply and demand forces in the global crude petroleum market, military processes in Iraq, Syria, Libya, and other countries, and global pandemic. Crude petroleum prices are closely related to the events and crises that countries are going through. The paper seeks to study these factors and the mechanism of their impact on global crude petroleum prices and the global economy. Based on the Granger causality test, the authors found that global crude oil prices determine global GDP in the short and long term, while global GDP has no impact on global oil prices. As a result, it is concluded that any global event or crisis can affect energy prices; the crises of 2008, 2014, 2020, and 2022 affected global crude petroleum prices. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023.