Impacts of Brent Crude Oil Price Fluctuations on Global Aquaculture Production During World Economic Crises

Abstract

This study evaluates the linkage between brent crude oil prices and volatility spillover on the global aquaculture volume -and values during world economic crises. Besides the main variable costs comprising feed expenses with over the half of total costs in aquaculture facilities, the energy expenditures are among the important operational costs that influence farm profits through feed costs overall, but also with direct effects in recirculating systems as electricity use. Findings in this study evidenced that global aquaculture volume and value is closely related to global brent crude oil price variations during the periods of crises, as a result of increase in production costs. The correlations between brent crude oil prices and percent changes in volume -or values of farmed fish covering the crises periods between 2008 and 2021 were highest as 0.798 (R=0.798134676) and 0.716 (R=0.715832960), respectively, which are close to zero “0”, showing strong correlations between the investigated structures. However, no correlation was found between the investigated structures during the pre-crisis, post-crisis or inter-crisis periods. Over the last ten years, there were three periods when brent oil prices dropped remarkably, with interrelated effects on world aquaculture production volume or values with severe price dip following the brent oil trends. Hence, the results from this study reveal that any severe change in the energy sector will in turn hit the aquaculture industry with significant influences on both production volume -and values. Therefore, information regarding the interrelation of brent crude oil price variations and global aquaculture production provided in this study, may support building management strategies for sustainable fish farming business with foresights to world economic crises.