1School of Management, CMR University, Bengaluru, Karnataka-560043. Email: kumar.supreeth@cmr.edu.in
2BE (ECE), MBA (Finance & Sys), MPhil (Business Administration), PhD (UK), Director for School of Management, CMR University, Bengaluru, Karnataka-560043. Email: purnaprasad.a@cmr.edu.in
This study investigates the dynamic relationship between oil price shocks, economic growth, and crude oil production in the U.S. using a Structural Vector Autoregression (SVAR) methodology. By simultaneously modeling these variables, the analysis captures both short- and long-term interactions and the causal effects among them. The findings show that West Texas Intermediate (WTI) price shocks significantly impact economic growth, both directly and indirectly through crude oil production dynamics, with adverse price increases hindering growth prospects, especially in the short-to-medium term. Moreover, fluctuations in crude oil production respond endogenously to changes in both economic activity and prices, underscoring the complex feedback mechanisms within the energy-economy nexus. The SVAR framework facilitates the differentiation of supply-side and demand-side shocks, offering nuanced insights into how external disturbances in the oil market are transmitted through the U.S. economy. Policy implications highlight the necessity for adaptive strategies that account for these interdependencies to bolster economic resilience in volatile oil markets. These results contribute to the broader energy economics literature by providing empirical evidence on the interplay between oil market dynamics and macroeconomic performance in a major oil-producing nation.
Keywords: West Texas Intermediate, BRENT Crude Oil, Economic Growth, Crude Oil Production, Structural Vector Autoregression, Impulse Response Function.
How to cite this article: Supreeth K, Arcot PP. Oil Price Shocks, Economic Growth, and Crude Oil Production Dynamics in the United States: An SVAR Approach. Int J Drug Deliv Technol. 2026;16(3): 56-65. DOI: 10.25258/ijddt.16.3.8
Source of support: Nil.
Conflict of interest: None