The Effect of Energy Security on Oil Export (The Case of Iran)

Abstract

Energy trade plays a crucial role in the growth and development of countries, especially for IRAN as one of the world's largest exporters of oil in the world. Identifying the factors that affect exports and their development, along with promoting export performance in the energy sector should be the focus of policy and strategic planning in an internationally competitive environment. Given the importance of energy trade in Iran, this study aimed to analyze the effect of the energy security index on oil exports using the Fully Modified Ordinary Least Square (FMOLS) method. The findings of study reveal that oil exports are negatively affected by oil energy security, i.e., as this unit deteriorates, the index of oil exports increases by over 3%. Furthermore, the study found that GDP and the exchange rate have a positive impact on oil exports, whereas energy prices and population density have an adverse impact. Furthermore, the study's results demonstrate that GDP and exchange rate have a positive effect on oil exports. Based on the findings of this study, first, it can be argued that an independent and powerful institution is essential to monitor and enforce policies, standards, and regulations to enhance energy efficiency. Second, upgrading old technologies, developing new ones, scaling up actions on energy efficiency, and increasing public knowledge and understanding about energy can reduce energy intensity and increase savings. Last but not least, a transition from high-consumption to low-consumption technologies designed to reduce energy consumption and maximize efficiency can increase oil exports.

Keywords: Energy Exports, Energy Security Index, Energy Consumption, FMOLS Method

JEL Classification: Q4, Q42, Q43, Q47

DOI: 10.7176/JETP/13-2-01

Publication date: April 30^th 2023