Munich Personal RePEc Archive

The Long-run and Short-run Effects of Crude Oil Price on Methanol Market in Iran

Komijani, Akbar and Gandali Alikhani, Nadiya and Naderi, Esmaeil (2012): The Long-run and Short-run Effects of Crude Oil Price on Methanol Market in Iran. Published in: International Journal of Energy Economics and Policy , Vol. 3, No. 1 (1. January 2013): pp. 43-50.

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Abstract

Substituting crude oil exports with value-added petrochemical products is one of the main strategies for policy makers in oil-driven economies to isolating the real sectors of economy from oil price volatility. This policy inclination has led to a body of literature in energy economics in recent decades. As a case study, this paper investigates the short-run and long-run relationship between Iran’s oil price and methanol price which is one of the most important non-oil exports of the oil-exporting country. To do so, the weekly data from 18 Jan. 2009 to 18 Sep. 2011 in a VECM framework is applied. The results show that in the long-run, oil price hikes leads to proportional increase in methanol price while in the short-run, this impact is not significant.

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