The Relationship between the Brent Price and Export: Turkish Case

This paper analysis the effect of oil price on Türkiye’s export. When oil price jumps, Türkiye’s export might cripple since the production cost rises at home. Since the Turkish export goods are price sensitive, it cannot pass it to the prices because of the competitive market. We hypothesis that an increase in oil price negatively affects the Turkish export. Our monthly data covers 01/2010 and 02/2026 and all obtained from the TUIK and TCMB web sites. Our dependent variable is Turkish export in USD, and independent variables are Brent oil price in USD, the average of foreign exchange basket ((Euro+USD)/2). After checking ADF unit root test and taking their first differences, our series become stationary. We determined the optimum lag length 3 via VAR. The Johansen Cointegration test shows at least one cointegration among the series. The normalized cointegrating coefficients reveal that an increase in Brent price by 10%, it will reduce export in Türkiye by 2.1%. Likewise, with a rise in basket exchange rate of 10% the exports fell by 1.8%. The Granger causality test reveals that there is a one-way causality from the oil price and exchange rate to Turkish export. As expected, there is no Granger Causality between basket foreign exchange rate and Brent prices in both ways