Oil price volatility negatively impacts stock markets in oil-importing countries.
Oil price volatility affects stock markets in different ways. When oil prices are uncertain, stock returns can go up or down, depending on the situation. If both oil prices and stock returns are low, higher oil price volatility leads to lower stock returns. But when stock returns are high and oil price volatility is low, increasing oil price volatility actually boosts stock returns. This study looked at ten major oil-importing countries over nearly two decades to understand these relationships.