Investigating the Influence of Oil Price, Oil Export on Foreign Reserve: Evidence from a Panel of OPEC Countries

Abstract

Oil export in oil producing countries has been considered as an important source of wealth, there is a transfer of income from oil importers to oil exporting countries. However, when the oil price falls, it means lower export earnings for oil exporting countries and consequently it affects the accretion to their external reserves. To thisend, the current study uses the data between 1997 and 2015 in a panel analysis of 11 OPEC members. From our findings, we discovered that there exists a long-run relationship between oil price, oil export and foreign reserve for the countries under observations.