Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102366
Authors: 
Farzanegan, Mohammad Reza
Parvari, Mozhgan Raeisian
Year of Publication: 
2014
Series/Report no.: 
Joint Discussion Paper Series in Economics 27-2014
Abstract: 
One of the main elements of economic sanctions against Iran due to its nuclear and military programs is crude oil exportation restrictions in addition to investment in Iranian energy related projects. Senders of such sanction are interested in understanding the impacts of such embargos on international oil prices. We apply unrestricted Vector Autoregressive (VAR) model, using impulse response (IRF) and variance decomposition (VDA) tools with annual data from 1965 to 2012 to analyze the dynamic response of international oil prices to Iranian oil export sanction. Controlling for the supply of non-Iranian oil and the world GDP per capita, we show that international oil prices respond positively to negative changes of the Iranian oil exports, our proxy of Iran oil sanctions. However, the increasing response of oil prices to the Iranian oil sanction is only significant in the first year after negative shock in Iran oil exports. Beyond the first year following shock, we do not observe a statistically significant response of oil prices.
Subjects: 
Oil Price
VAR Model
Sanction
Iran
JEL: 
E37
Q32
Q34
Q38
Q43
Document Type: 
Working Paper

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