An Econometric Study on Oil Prices, Exchange Rate and Exports: A Case of Russia, Azerbaijan and Indonesia

After oil crisis in 1970s, discussions of the oil price effect on economies have accelerated. In addition to being a exhaustible energy source, the environmental pollution it generates has led many developed countries to shift towards renewable energy sources. Furthermore, fluctuations in oil prices and increased dependence on it have disruptive effects on national economies. All these factors pose a threat to countries with oil reserves and economies heavily reliant on the oil industry. This study, examines the relationship between oil prices, exports, and exchange rates in Russia, Azerbaijan, and Indonesia whose sum of oil consumption and production exceed that of Europe but have not been the primary focus of previous research. This study employs a panel causality test and encompasses data from 1996 to 2021. The findings indicate the existence of a unidirectional causality relationship from oil prices to both exports and exchange rates in the countries studied. Additionally, the research reveals a unidirectional relationship between exports and exchange rates.