The Impact of Geopolitical Events Involving OPEC countries in the Persian Gulf on Brent Crude Oil Volatility between 2019 and 2025

Sammanfattning

This study examines the short-term impact of geopolitical tensions involving the Organization of the Petroleum Exporting Countries (OPEC) states located in the Persian Gulf on Brent crude oil price volatility. Given that around 20% of the global oil supply passes through the Persian Gulf, geopolitical events represent a major factor affecting the global economy. The purpose of the research is to evaluate the effects of major geopolitical events from 2019 to 2025, which may influence oil price volatility on the days of the events and in the immediate days following them. Using daily Brent crude oil spot price data obtained from the Federal Reserve Economic Data (FRED) database, the study focuses on evaluating three major events: the drone attacks on Saudi Arabian oil facilities in September 2019, the April 2024 Israel strike on Iranian targets, and the June 2025 Israel airstrikes on Iran. The research aims to evaluate the effects of these events using the EGARCH (1,1) model within the frameworks of the Efficient Market Hypothesis and forward-looking market behaviour. The results indicate a slight increase in Brent crude oil volatility around the selected event dates; however, the EGARCH estimates do not show statistically significant event-window effects. The observed volatility movements appear temporary because volatility levels revert to pre-event levels within a relatively short period after each event.