Informatics Publishing Limited

LARISA G. CHUVAKHINA, ¹, NIKOLAI A. MOLDENHAUER ², ANAHITA NASIRBEIK ³

Affiliations
1 Associate Professor of the Department of World Economy and International Business,, RU
2 Postgraduate student, Department of World Economy & International Business, Faculty of international economic relations, Financial University under the Government of the Russian Federation, 49, Leningradsky avenue, RU
3 Postgraduate student, Department of World Economy & International Business, Faculty of international economic relations, Financial University under the Government of the Russian Federation, 49, Leningradsky avenue, Moscow, RU

Abstract

The current petrodollar system has become a key factor in US economic power by creating external demand for US dollars and treasury bonds, which has allowed accumulation of the state debt without any change in actual credit solvency. The mechanism of this interaction is based on the conclusion of an agreement between the United States and Saudi Arabia, to which joined other OPEC countries subsequently. As a result, OPEC countries pledged to sell oil on the world market exclusively for US dollars. In exchange, the United States granted preferential loans and technology to petroleum exporting countries. An increase in oil production in the United States alongside growth in exports has neutralized US dependence on oil supplies from OPEC countries, resulting in the transformation of the petrodollar system and a shift in the balance of power in the world oil market. The US had no need to interact with OPEC countries, and the strengthening of sanctions imposed by Western countries against third countries has contributed to the establishment of a new balance of power in the oil market, through coordination between OPEC+ exporters. A key feature of the change in the position on the world oil market was the new status of the United States, turning from one of the leading oil importers to a world-class exporter. This situation led to a reorientation of OPEC to other markets and to competition with the United States for a share of the world oil market. As a response, the OPEC+ format was created, which led to an increased influence of exporting countries on the oil market, which is confirmed by the conclusions of the built mathematical model based on the analysis of correlation dependencies of dependent and independent variables used to construct regression equations. The dynamics of world oil market prices and the median values of OPEC countries’ currencies against the US dollar were selected as dependent variables. Variables that impact the formation of dependent values are the US dollar index, the level of oil production by OPEC countries and the interest rate on federal funds of the US Federal Reserve. The equations and correlation analysis were based on monthly data from January 2007 to October 2020. To assess the changed nature of the influence of OPEC countries on the global dynamics of oil prices, the time interval was divided into two intervals. The first selected time interval covers the period before the creation of the OPEC+ format: January 2007 - November 2016. Accordingly, the second selected time interval includes the duration of the OPEC+ agreement: December 2016-October 2020. To determine the effective influence of the considering variables on the results obtained at the initial stage, the correlation value was set within - 0.5 d” R e” 0.5, which allowed us to filter out variables with insignificant correlation. After obtaining the correlation dependencies, all pairs of dependent and independent variables were analyzed for approximating functions, which allowed us to study the nature of the dependence in more detail and more accurately construct the regression equations.

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