Selected Oil Price Benchmarks and Sustainable Revenue Profile of OPEC Member Countries: A Symmetric and Asymmetric Analyses

This paper examines the impact of different oil price benchmarks on the revenue profile of OPEC countries from 1990 to 2024. While there are prior studies on this subject, most of these studies adopted a symmetrical approach, overlooking the asymmetric effects of price shocks on government revenues. Additionally, prior research often aggregates oil price benchmarks, simplifying the complex dynamics influencing OPEC revenues. This study fills these gaps by evaluating both symmetrical and asymmetrical responses of the revenue profiles of OPEC countries to major global oil price benchmarks—NYMEX WTI, ICE Brent, DME Oman, and the OPEC reference basket. The study employs linear and nonlinear panel (ARDL) models on annual data from 1990 to 2024. The linear ARDL results indicate that government revenues respond positively to ICE Brent, NYMEX WTI and OPEC spot prices but negatively to DME Oman prices. The nonlinear ARDL model reveals asymmetric responses: revenue is more sensitive to negative shocks in ICE Brent and OPEC prices, while DME Oman price increases reduce revenues. Notably, NYMEX WTI fluctuations have minimal impact. The main conclusion of the paper is that OPEC’s fiscal stability is highly vulnerable to asymmetric, long-run oil price shocks. The study recommends policymakers adopt benchmark-specific fiscal hedging strategies, such as put options, and strategically diversify export markets to mitigate risk.