Abstract
<jats:p>The current research aims to examine the impact of fluctuations in global financial market volatility, geopolitical risk, the energy transition, and global macroeconomic and structural control variables on crude oil prices in the modern global energy economy. The study uses annual time series data from 1990 to 2024 from international databases such as World Bank, the International Energy Agency (IEA), the Federal Reserve Economic Data (FRED), OPEC, and the Geopolitical Risk (GPR) Index database to estimate short- and long run relationships between the variables using the Autoregressive Distributed Lag (ARDL) and Error Correction Model (ECM) approaches, with FMOLS deployed for sensitivity analysis and robustness checks. The results indicate that financial market volatility can statistically reduce crude oil prices both in the short and long runs, affirming the global financial cycle theory. However, geopolitical risk is shown to have an insignificant effect on crude prices in the short and long runs. Furthermore, the energy transition has an increasing effect on crude oil prices in the short run. Geopolitical risk weakly alters the effect of global financial market volatility, but significantly shifts the energy transition from a reducing effect to an increasing one, with a threshold of 133.05. Regarding the control variables, OPEC allocation policy, global inflation, and the real GDP growth rate contribute to lowering crude oil prices, while changes in crude oil supply, oil future prices, urban population growth rate, and the U.S. index have an increasing effect on crude oil prices. The study suggests that better supervision of financial markets, international peace and global stability efforts, faster investments in renewable energies, and more comprehensive energy policy frameworks are needed to make energy markets more stable.</jats:p>