US partisan conflict uncertainty and oil prices

This empirical study significantly contributes in building emerging literature by investigating the impact of US partisan conflict uncertainty on international oil prices. It models oil prices through non-linear Quantile Autoregressive Distributed Lag (QARDL) methods in order to consider potential (non-linear) asymmetric effects of partisan political uncertainty on oil prices. The empirical results clearly document the asymmetric (non-linear) impact of partisan conflict uncertainty on international oil prices, which has been in contrast to the linear case. The findings also expose that the transmission mechanism of partisan political uncertainty to oil prices is validated through the economic growth channel. The empirical findings contribute to existing research by assisting investors in the oil industry with risk identification, analysis, and mitigation. The results can assist in discovering the links between US political risk and oil markets, determining an important element of political risk factors facing investors who want to participate in the oil industry.