Publications

Will Government Support for CCS-EOR Lead to Reduced Emissions?

Axel Pierru, Hossa Almutairi

Government support for CCS-EOR projects is often contested on the grounds that the resulting increase in oil production undermines their environmental benefits. This paper summarizes a simple approach based on a marginal reasoning consistent with economic decision-making. It produces analytical…

Pierru, Axel

Almutairi, Hossa

Assessing Climate Mitigation Benefits of Public Support to CCS-EOR: An Economic Analysis

Hossa Almutairi, Axel Pierru

Government support for CCS-EOR projects is sometimes contested on the grounds that the resulting increase in oil production undermines their environmental benefits. Addressing this concern requires determining the effects of implementing CCS-EOR on global CO2 emissions. This paper presents a…

Almutairi, Hossa

Pierru, Axel

Hard-linking a Top-down Economic Model with a Bottom-up Energy System for an Oil-exporting Country with Price Controls

Science Direct

Olivier Durand-Lasserve, Axel Pierru, Hossa Almutairi, Abdullah AlJarboua, Shreekar Pradhan, Frederic Murphy

Oil Market Stabilization: The Performance of OPEC and Its Allies

IAEE

Axel Pierru, Hossa Almutairi, James L. Smith

Resilience of Saudi Arabia’s Economy to Oil Shocks: Effects of Economic Reforms

Hossa Almutairi, Marzio Galeotti, Baltasar Manzano, Axel Pierru

We assess the extent to which the implementation of Saudi Vision 2030 policies enhances the Saudi economy’s resilience to oil price and production shocks, and to the productivity of tradable and non-tradable goods. We extend Blazquez et al.’s (2021) dynamic…

Almutairi, Hossa

Galeotti, Marzio

Manzano, Baltasar

Pierru, Axel

Cooperate or Compete? Insights from Simulating a Global Oil Market with No Residual Supplier

IAEE

Bertrand Rioux, Axel Pierru, Abdullah AlJarboua, Fatih Karanfil, Shahd Alrashed, Colin Ward

Modeling World Oil Market Questions: An Economic Perspective

Science Direct

The choice of a modeling approach is driven by the oil policy or market question that needs to be addressed. We provide the non-modeling community with insightful information on oil market models, shedding light on the economic interpretation of technical…

Olivier Durand-Lasserve, Axel Pierru

The Value of Opec’s Spare Capacity to the Oil Market and Global Economy

Wiley Online Library

We investigate the extent to which OPEC has succeeded in its self‐stated mission of stabilising the oil market and the implications for the world’s economy. We discuss the modelling framework developed by Pierru, Smith and Zamrik (2018) and Pierru, Smith…

Hossa Almutairi, Axel Pierru, James L. Smith

The Opportunity Cost of Domestic Oil Consumption For an Oil exporter: Illustration for Saudi Arabia

Science Direct

We develop a partial equilibrium framework to assess the opportunity cost of domestic oil consumption for an oil-exporting country. We show that the opportunity cost depends on various factors, including the constraints to which the oil producer is subject and…

Fatih Karanfil, Axel Pierru

Sectoral and Economy-Wide Effects of Domestic Energy Price Reforms in Saudi Arabia

Olivier Durand-Lasserve, Hossa Almutairi, Abdullah AlJarboua, Frederic Murphy, Shreekar Pradhan, Axel Pierru

This paper simulates the sectoral and economy-wide consequences of deregulating energy prices in Saudi Arabia. Our analysis is based on KAPSARC’s general equilibrium energy model (KEMGE), a new hybrid computable general equilibrium model (CGE). The model examines the effects of…

Durand-Lasserve, Olivier

Almutairi, Hossa

AlJarboua, Abdullah

Murphy, Frederic

Pradhan, Shreekar

Pierru, Axel

Cooperate or Compete? Insights from Simulating a Global Oil Market with No Residual Supplier

Bertrand Rioux, Abdullah AlJarboua, Fatih Karanfil, Axel Pierru, Shahd Alrashed, Colin Ward

Structural changes in the global oil sector are disrupting conventional market dynamics and the roles played by competing and cooperating producers. Industry players are adjusting to the shale (or ‘tight’) oil revolution and the possibility of plateauing or peaking global…

Rioux, Bertrand

AlJarboua, Abdullah

Karanfil, Fatih

Pierru, Axel

Alrashed, Shahd

Ward, Colin

Promoting Energy Market Stability in a Transitioning World

T20

Stability in international energy markets is critical for promoting adequate investment in infrastructure so that economic activity can be sustained, in order to provide pathways for growth and improvement in welfare. In light of recent global events and the varied…

Kenneth Medlock III, Axel Pierru, Hossa Almutairi

Simulating a Global Oil Market With No Residual Supplier

Bertrand Rioux, Abdullah AlJarboua, Fatih Karanfil, Axel Pierru, Shahd Alrashed, Colin Ward

Motivation and objective of the study What if OPEC decided to abandon organizing residual production collectively, transitioning the world permanently to a competitive oil market? This commentary is based on a forthcoming KAPSARC paper, “Cooperate or Compete? Insights from Simulating…

Rioux, Bertrand

AlJarboua, Abdullah

Karanfil, Fatih

Pierru, Axel

Alrashed, Shahd

Ward, Colin

OPEC’s Pursuit of Market Stability

IAEE

We investigate attempts by the Organization of Petroleum Exporting Countries (OPEC) to stabilize the price of oil during the past fifty years. We first develop a novel decomposition of shifts in global demand and non-OPEC supply. This decomposition provides a…

Axel Pierru, James L. Smith, Hossa Almutairi

Analyzing the Effects of Saudi Arabia’s Economic Reforms Using a Dynamic Stochastic General Equilibrium Model

Jorge Blazquez, Marzio Galeotti, Baltasar Manzano, Axel Pierru, Shreekar Pradhan

Saudi Arabia is the world’s second-largest holder of proved oil reserves and the second-largest producer of petroleum liquids. The country is the largest exporter of crude oil, with a share of 16% of total crude oil exports in 2017. Saudi Arabia’s…

Blazquez, Jorge

Galeotti, Marzio

Manzano, Baltasar

Pierru, Axel

Pradhan, Shreekar

Optimal Policies for Managing Oil Revenue Stabilization Funds: An Illustration Using Saudi Arabia

Science Direct

We develop an analytical approach that offers insights into how governments can better manage an oil-revenue stabilization fund. The model maximizes the expected intertemporal utility of households and consists of decisions that are a function of the fund level and…

Nader AlKathiri, Tarek Atalla, Frederic Murphy, Axel Pierru

Implementing Alternative Pricing Policies in Economic Equilibrium Models Using the Extended Mathematical Programming Framework

Bertrand Rioux, Abdullah AlJarboua, Frederic Murphy, Axel Pierru

Standard economic optimization models represent markets in perfect competition. They are commonly used, though they may not accurately represent real-world policies and regulations. Equilibrium models built using a mixed complementarity problem (MCP) approach are capable of simulating more flexible pricing…

Rioux, Bertrand

AlJarboua, Abdullah

Murphy, Frederic

Pierru, Axel

The Opportunity Cost of Domestic Oil Consumption for an Oil Exporter: Illustration for Saudi Arabia

Fatih Karanfil, Axel Pierru

When appraising investment projects from a public perspective, a barrel of oil displaced from or added to domestic consumption has to be valued at its opportunity cost. This paper develops a partial-equilibrium framework to assess the opportunity cost of domestic…

Karanfil, Fatih

Pierru, Axel

K-DSGE: A Dynamic Stochastic General Equilibrium Model for Saudi Arabia

Jorge Blazquez, Marzio Galeotti, Baltasar Manzano, Axel Pierru, Shreekar Pradhan

This paper describes a dynamic stochastic general equilibrium (DSGE) model of the Saudi Arabian economy, developed by KAPSARC researchers. The K-DSGE model is to be used for simulations and experiments to assess the impact of economic reforms within the Saudi…

Blazquez, Jorge

Galeotti, Marzio

Manzano, Baltasar

Pierru, Axel

Pradhan, Shreekar

Estimating the Household Consumption Function in Saudi Arabia: An Error Correction Approach

Taylor & Francis Online

We estimate a micro-founded life-cycle consumption model for Saudi Arabia over the period 1970–2017 using error correction model procedures. Dynamic adjustments are significant, and both income and wealth are found to have significant effects, with a long-run marginal propensity to…

Goblan Al Gahtani, Carlo Andrea Bollino, Simona Bigerna, Axel Pierru