Does Oil Price Volatility Drive or Hinder the Global Sustainable Energy Transition? Evidence from Oil-Exporting Versus Oil-Importing Countries

This paper examines whether oil price volatility accelerates or decelerates the global sustainable energy transition by analyzing the differential responses of oil exporters and oil importers. Using a Panel Autoregressive Distributed Lag (P-ARDL) estimation on a balanced panel of 30 countries (2002–2023), this study investigates the long-term sustainability of energy shifts under market uncertainty. We find significant asymmetric impacts: oil-exporting countries demonstrate a strong, positive long-run response to volatility, suggesting that price uncertainty acts as a catalyst for economic diversification and sustainable investments in renewables as a strategic risk management tool. Conversely, oil-importing countries show no significant volatility response; their transition toward sustainability is primarily driven by economic growth rather than oil market forces. The error correction mechanisms reveal annual adjustment rates of 35.9% for importers and 21.5% for exporters, confirming stable long-run sustainable development relationships. These findings challenge the hypothesis of a uniform global transition, highlighting that achieving sustainability goals is highly dependent on a nation’s position in international oil markets, necessitating tailored policy frameworks for a resilient energy future.