Analysis of the Impact of Oil Price Fluctuations on the Profitability and Liquidity of a Sample of Private Iraqi Commercial Banks (2005-2022)

Abstract

This paper aims to analyze the impact of oil price fluctuations (2005 – 2022) on the performance of a sample of private Iraqi commercial banks. It seeks to determine whether this impact is direct or mediated through macroeconomic variables, using time series data for annual Brent crude oil prices and profitability and liquidity indicators for the banks. Multiple analytical methods were employed, including descriptive and inductive approaches, while the analytical method was used for the practical aspect. It was hypothesized that there a positive relationship between oil price fluctuations and indicators of profitability and liquidity، The paper reached several findings, the most significant being a negative relationship in the short term between oil price fluctuations and the profitability index, as well as a negative relationship between fluctuations and the liquidity index in the short term the paper recommends that policymakers and financial decision-makers monitor economic changes and design programs or scenarios that simulate oil price fluctuations to develop effective strategies. It also suggests reducing banking liquidity levels and enhancing bank activities to increase profitability