Do Rising and Falling Oil Prices Affect Non-Oil Trade Balance Equally? Evidence from OPEC Countries

This study investigates the effects of oil price changes on the non-oil trade balance in four major OPEC economies – the Kingdom of Saudi Arabia (KSA), Kuwait, Nigeria, and Venezuela – over the period 1982-2022. While oil revenues are a fundamental driver of economic activity in these countries, their impact on trade dynamics remains a critical policy concern. Additionally, the empirical literature shows that oil price increases and decreases might have unequal magnitude of effects on macroeconomic indicators, including the trade balance. This research explores whether rising and falling oil prices disproportionately affect non-oil trade balances in OPEC countries.