The Effects of Oil Price Shocks on the Oil Reserve Life in OPEC Countries (Using the NARDL Model)

The purpose of this study is to investigate the asymmetric effects of crude oil prices on oil stocks in OPEC member countries. Indeed, in this research, the effects of positive and negative shocks of OPEC crude oil prices on OPEC's oil reserves index have been studied using the non-linear distributed autoregressive model (NARDL) during the period of 1980 to 2015.The results show that the effects of positive and negative shocks of crude oil prices on oil reserves life in short run for Venezuela are asymmetric; for Iran, Libya, the United Arab Emirates, Angola and Ecuador in long run are asymmetric; for Saudi Arabia and Kuwait in both short run and long run are asymmetric, and finally symmetric for Iraq, Qatar, Nigeria and Algeria countries. Also, the results of the model show that the effect of negative oil price shocks on oil reserves life of these countries (exclude Libya) is higher than positive oil price shocks. The results of the cumulative asymmetric effect of oil price shocks on the oil reserves life show that response of the oil reserves life of Saudi Arabia and Kuwait to the asymmetric oil price shocks is different from that of other OPEC members, because the asymmetric oil price shocks have a permanent and significantly negative effect on their oil reserves life. While this effect is temporary and positive for Venezuela and temporary and negative for Libya, it is not statistically significant for other countries.