An Analyzing the Impact of Oil Price Volatility, Unpredictability, and Geopolitical Uncertainty on the Persistency of BRICS Economies

Abstract

Abstract It is timely and crucial to research the effects of oil price volatility, unpredictability, and geopolitical instability on the persistence of BRICS economies. Given the continually shifting global oil markets and rising geopolitical tensions, it is critical to comprehend how these factors impact the economies of the BRICS countries. We can support these economies in remaining resilient and ensuring their future growth and success by learning how to handle and overcome these issues. This study examines how oil price volatility, predictability, and geopolitical unpredictability affect the BRICS economies' ability to endure and their economic success. The study explores the dynamic relationship between these factors during the period from 2004 to 2022 by using advanced econometric approaches, such as panel data analysis and PSRT autoregression. The results show that, with various degrees of sensitivity across the five economies, changes in the price of oil have a major impact on the economic growth of the BRICS nations. Furthermore, it has been found that geopolitical unpredictability tends to make the negative effects of oil price volatility worse, particularly in the energy-dependent economies of Russia and Brazil. The 2012 reform's impact on the oil price volatility index (OPVI) stock association is also investigated in this study. The study recommends that the BRICS nations adopt policies to lessen the negative effects of oil price shocks and geopolitical risks, including increasing their energy diversification and implementing efficient risk management plans to promote long-term economic growth.