THE EFFECTS OF OIL PRICES ON UNEMPLOYMENT AND EMPLOYMENT LEVEL

Abstract

Oil prices seriously affect and change the economic conditions of countries. Different basic macroeconomic indicators such as inflation, production level, employment, unemployment, balance of payments are affected by changing oil prices in different ways. Hence, crude oil is in high demand globally. The two most intensely traded oil types in the World are Brent Crude Oil and West Toros Intermediate (WTI). The balance of supply and demand determines oil prices. However, there are different factors affecting oil prices in the short term and their effects are not permanent. Therefore, the main determinant of oil prices is the long-term factors. The decreases and increases in oil prices bring along many different problems on a global scale. Since oil prices are measured in dollars, the dollar decreases when oil prices increase or the dollar increases when oil prices decrease. In the study, the factors that affect the pricing of crude oil, which is very important for the global economy, are investigated, and the effects of the change in oil prices on unemployment and employment level constitute the purpose of the study. For this aim, Tespam World Energy Outlook Report (2020), Turkey Petroleum, Crude Oil and Natural Gas Sector Report (2020), OPEC (2020) and TUIK data were utilized. The result of the study as well as changes in oil prices in the world economy in Turkey have also been found to be of serious impact on employment and unemployment.