Oil Price Volatility and Economic Transformation in the Middle East: A Study of the Saudi-Iran Proxy War

Xin Li

2025

Abstract

The intricate intertwining of global energy markets and geopolitical dynamics in 2024 highlighted the limitations of traditional analytical frameworks. In the context of Brent crude oil averaging $81 per barrel for the year, the 165,273 recorded proxy conflict incidents— a 15% increase from the previous year, ac-cording to ACLED —exposed the emerging characteristics of new geopolitical risks: high-frequency, low-intensity, and multi-theater interconnections. The findings show that with each additional conflict event, the oil price increases by $1.5 per barrel in the short term (R² = 0.62), and for every $1 per barrel increase in oil price volatility, the non-oil GDP share and other transformation indicators decrease by 0.35 percentage points (R² = 0.48). This result supports the dynamic resource curse hypothesis and reveals the deep-rooted conflict between traditional energy security perspectives and economic transformation policies.

Paper Citation

in Harvard Style

Li X. (2025). Oil Price Volatility and Economic Transformation in the Middle East: A Study of the Saudi-Iran Proxy War. In Proceedings of the 1st International Conference on Politics, Law, and Social Science - Volume 1: ICPLSS; ISBN 978-989-758-785-6, SciTePress, pages 160-164. DOI: 10.5220/0014298700004859

in Bibtex Style

@conference{icplss25,
author={Xin Li},
title={Oil Price Volatility and Economic Transformation in the Middle East: A Study of the Saudi-Iran Proxy War},
booktitle={Proceedings of the 1st International Conference on Politics, Law, and Social Science - Volume 1: ICPLSS},
year={2025},
pages={160-164},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0014298700004859},
isbn={978-989-758-785-6},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 1st International Conference on Politics, Law, and Social Science - Volume 1: ICPLSS
TI - Oil Price Volatility and Economic Transformation in the Middle East: A Study of the Saudi-Iran Proxy War
SN - 978-989-758-785-6
AU - Li X.
PY - 2025
SP - 160
EP - 164
DO - 10.5220/0014298700004859
PB - SciTePress