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

      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

      2021
      Sectoral and Economy-Wide Effects of Domestic Energy Price Reforms in Saudi Arabia
      Models, Data and Tools

      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…

      Olivier Durand-Lasserve Durand-Lasserve, Olivier
      Hossa Almutairi Almutairi, Hossa
      Abdullah AlJarboua AlJarboua, Abdullah
      Frederic Murphy Murphy, Frederic
      Shreekar Pradhan Pradhan, Shreekar
      Axel Pierru Pierru, Axel
      19th August 2020
      Cooperate or Compete? Insights from Simulating a Global Oil Market with No Residual Supplier
      Future of Global Oil Markets

      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…

      Bertrand Rioux Rioux, Bertrand
      Abdullah AlJarboua AlJarboua, Abdullah
      Fatih Karanfil Karanfil, Fatih
      Axel Pierru Pierru, Axel
      Shahd Alrashed Alrashed, Shahd
      Colin Ward Ward, Colin
      6th August 2020
      Simulating a Global Oil Market With No Residual Supplier
      Future of Global Oil Markets

      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…

      Bertrand Rioux Rioux, Bertrand
      Abdullah AlJarboua AlJarboua, Abdullah
      Fatih Karanfil Karanfil, Fatih
      Axel Pierru Pierru, Axel
      Shahd Alrashed Alrashed, Shahd
      Colin Ward Ward, Colin
      16th July 2020
      OPEC’s Pursuit of Market Stability

      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

      2020
      Analyzing the Effects of Saudi Arabia’s Economic Reforms Using a Dynamic Stochastic General Equilibrium Model
      Models, Data and Tools

      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…

      Jorge Blazquez Blazquez, Jorge
      Marzio Galeotti Galeotti, Marzio
      Baltasar Manzano Manzano, Baltasar
      Axel Pierru Pierru, Axel
      Shreekar Pradhan Pradhan, Shreekar
      21st May 2020
      Implementing Alternative Pricing Policies in Economic Equilibrium Models Using the Extended Mathematical Programming Framework
      Regional Energy Markets

      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…

      Bertrand Rioux Rioux, Bertrand
      Abdullah AlJarboua AlJarboua, Abdullah
      Frederic Murphy Murphy, Frederic
      Axel Pierru Pierru, Axel
      12th March 2020
      K-DSGE: A Dynamic Stochastic General Equilibrium Model for Saudi Arabia

      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…

      Jorge Blazquez Blazquez, Jorge
      Marzio Galeotti Galeotti, Marzio
      Baltasar Manzano Manzano, Baltasar
      Axel Pierru Pierru, Axel
      Shreekar Pradhan Pradhan, Shreekar
      3rd February 2020
      Estimating the Household Consumption Function in Saudi Arabia: An Error Correction Approach

      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

      2019
      KAPSARC’s Contribution to Evaluating the Impact of Price Controls
      Regional Energy Markets Models, Data and Tools

      KAPSARC’s Contribution to Evaluating the Impact of Price Controls

      Axel Pierru, Walid Matar

      The European Journal of Operational Research has just published a paper, “Measuring the effects of price controls using mixed complementarity models” (2019). It detailed a series of innovative modeling approaches developed by KAPSARC researchers over the last six years. The…

      Axel Pierru Pierru, Axel
      Walid Matar Matar, Walid
      1st September 2019
      Estimating the Household Consumption Function in Saudi Arabia
      Evaluation of Public Investment Projects Energy and Economic Vulnerability

      Estimating the Household Consumption Function in Saudi Arabia

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

      This research is part of a joint project between the Saudi Arabian Monetary Authority (SAMA) and the King Abdullah Petroleum Studies and Research Center (KAPSARC). This paper estimates a micro-based life cycle consumption model for Saudi Arabia over the period…

      Goblan Al Gahtani Goblan Al Gahtani
      Carlo Andrea Bollino Bollino, Carlo Andrea
      Simona Bigerna Bigerna, Simona
      Axel Pierru Pierru, Axel
      5th February 2019
      The Economic Impact of Price Controls on China’s Natural Gas Supply Chain

      The Economic Impact of Price Controls on China’s Natural Gas Supply Chain

      Science Direct

      Despite significant progress made by China in liberalizing its natural gas market, certain key areas such as market access and pricing mechanisms remain controlled by the government.

      Axel Pierru, Kang Wu, Frederic Murphy, Philipp Galkin, Bertrand Rioux, Yan Li, Artem Malov, Felipe Feijoo

      2019
      The Costs and Gains of Coordinating Electricity Generation in the Gulf Cooperation Council Utilizing the Interconnector
      Regional Energy Markets

      The Costs and Gains of Coordinating Electricity Generation in the Gulf Cooperation Council Utilizing the Interconnector

      David Wogan, Frederic Murphy, Axel Pierru

      Countries in the Gulf Cooperation Council (GCC) have installed a network of high-voltage transmission lines, known as the GCC Interconnector, which links the member states of Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates (UAE). The Interconnector…

      David Wogan Wogan, David
      Frederic Murphy Murphy, Frederic
      Axel Pierru Pierru, Axel
      10th June 2018
      OPEC’s Impact on Oil Price Volatility: The Role of Spare Capacity
      Future of Global Oil Markets

      OPEC’s Impact on Oil Price Volatility: The Role of Spare Capacity

      Energy Journal

      OPEC claims to hold and use spare production capacity to stabilize the crude oil market. We study the impact of that buffer on the volatility of oil prices. After estimating the stochastic process that generates shocks to demand and supply,…

      Axel Pierru, Tamim Zamrik

      2018
      The Economic Impact of Price Controls on China’s Natural Gas Supply Chain
      Regional Energy Markets

      The Economic Impact of Price Controls on China’s Natural Gas Supply Chain

      Bertrand Rioux, Philipp Galkin, Frederic Murphy, Axel Pierru, Kang Wu

      Despite significant progress made by China in liberalizing its natural gas market, certain key areas such as market access and pricing mechanisms remain heavily monopolized or controlled by the government. To assess how such distortions impact the market, we developed…

      Bertrand Rioux Rioux, Bertrand
      Philipp Galkin Galkin, Philipp
      Frederic Murphy Murphy, Frederic
      Axel Pierru Pierru, Axel
      Kang Wu Wu, Kang
      24th May 2018