Global Events (2010–2022) and Oil Pricing Mechanisms: Impacts and Future Prospects
Abstract
This research endeavors to elucidate the historical context of oil pricing and to investigate the repercussions of the Arab Spring, the COVID-19 pandemic, and the Ukraine conflict on oil prices. Additionally, it seeks to analyze the future potential and viability of denominating oil transactions in a currency, or multiple currencies, alternative to the U.S. dollar. The study adopts a descriptive-analytical methodology, presenting fundamental concepts pertaining to oil pricing, the historical trajectory of pricing mechanisms, and a chronological exposition of the Arab Spring, the COVID-19 pandemic, and the Ukraine conflict, thereby illustrating their impacts on the oil market and their influence on pricing mechanisms.
The findings of this study confirm that oil pricing is predominantly conducted in U.S. dollars and that global events have not significantly altered the internationally established pricing mechanisms. Achieving a departure from U.S. dollar dominance necessitates the collective address of specific conditions and scenarios by oil-exporting nations. However, the prevailing lack of political consensus and cooperation among these nations, coupled with their increasing reliance on the U.S. dollar, renders a shift from dollar hegemony highly improbable, particularly in the short-term.
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