Geopolitical risk and crude oil import vulnerability in Vietnam: evidence from an ARDL approach

This paper investigates whether geopolitical risk increases Vietnam’s vulnerability in crude oil imports in both the short and the long run. Using monthly data for 2016M7–2023M12, the study employs an ARDL framework in which crude oil import value is explained by the geopolitical risk index, Brent crude oil prices, the VND/USD exchange rate, and a dummy variable capturing the Russia–Ukraine war shock. The empirical results indicate that the variables are integrated of mixed orders, I(0) and I(1), which supports the use of the ARDL framework. Bounds testing confirms the existence of a long-run relationship among the variables. The error-correction term is negative and highly significant, implying a rapid adjustment back to equilibrium after short-run shocks. Among the explanatory variables, the exchange rate emerges as the most robust driver of Vietnam’s crude oil import vulnerability, while the Russia–Ukraine war dummy captures an additional adverse geopolitical shock. By contrast, the direct effect of the aggregate geopolitical risk index is weaker. The findings suggest that Vietnam’s energy vulnerability is transmitted primarily through exchange-rate pressure and major geopolitical disruptions. Additional robustness checks, including an alternative model using crude oil import quantity, confirm the qualitative stability of the main findings.