HA537 : Assessing the effects of crude oil production on the foreign exchange earnings of Iran
Thesis > Central Library of Shahrood University > Industrial Engineering & Management > MSc > 2025
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Abstarct: As one of the important sources of unconventional energy in recent decades, shale oil has gained a special place in the developments in the global oil market. The increase in production of this resource has not only changed the structure of global oil supply, but also has had direct effects on global prices and oil revenues of exporting countries, especially OPEC members. In this study, using a systems dynamics approach and simulation in Vensim software, the effects of crude oil production on the world price and foreign exchange earnings of Iran and OPEC members have been examined. The results show that in the short term, increasing crude oil production will lead to growth in oil revenues due to positive market response and relative stability of demand. However, in the long term, rapid supply growth disrupts market equilibrium and puts downward pressure on global oil prices. The findings indicate that a 20% increase in real oil production leads to a decrease of about 15% in global oil prices, resulting in a 10-12% decrease in oil revenues for Iran and some OPEC members. This indicates the dual impact of crude oil on oil revenues, with the initial benefits of increased production soon offset by losses from falling prices. These results confirm that the dynamics of the global oil market are affected by competition among producers, global demand levels, and geopolitical policies, and that the accelerated expansion of crude oil production without coordination with OPEC policies can lead to a decrease in foreign exchange earnings of exporting countries. Therefore, prudent policymaking regarding production growth and moving towards diversifying income sources are essential strategies to reduce the vulnerability of oil economies to fluctuations in the global oil market.
Keywords:
#Production of crude oil #World oil price #Oil revenues of Iran and OPEC members #System dynamics Keeping place: Central Library of Shahrood University
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