Supply Chain Resilience and International Trade Flow Sustainability: Evidence from Saudi Arabia

Abstract This study investigates Saudi Arabia’s supply chain resilience and trade flow sustainability amid global disruptions such as the U.S.–China trade war and the Russia–Ukraine conflict. A novel methodological contribution is made by integrating Principal Component Analysis (PCA) with a Vector Error Correction Model (VECM), allowing for a robust identification of the key determinants of trade flows, including oil prices, trade openness, logistics efficiency, and geopolitical risks. This integrated approach provides a comprehensive and dynamic assessment of trade resilience in an oil-dependent economy. The findings reveal that while oil prices continue to influence trade flows, Saudi Arabia’s investments in logistics infrastructure, trade diversification, and digital supply chain reforms play a more significant role in ensuring stability. Moreover, the results show that geopolitical shocks, though disruptive in the short term, have limited long-term impacts due to Saudi Arabia’s strong global trade integration. This paper contributes to the literature by demonstrating how supply chain efficiency and diversification strategies can reduce vulnerability to global shocks. It offers empirical evidence that distinguishes Saudi Arabia from other hydrocarbon exporters, underscoring the importance of infrastructure, openness, and strategic planning in sustaining trade resilience.