Sectoral Heterogeneity in Exposure to Oil Price Shocks: Evidence from a Fixed-Effects Panel Analysis
Abstract
This paper investigates how the exposure to oil price shocks differs across sectors, targeting airlines, oil producers and shipping companies. The analysis is based on a panel of listed companies with daily observations, including 28th of February 2026 (the start date of the Iran-US-Israel conflict). Fixed-effects regressions are generated, including Brent crude oil returns as main explanatory variable and S&P 500 index for capturing global market conditions. In order to complement the short-run analysis, the study develops an annual sector-level dataset (2007–2026), subsequently estimating one year ahead forecast regressions. The results emphasize sectoral heterogeneity in the exposure to oil price shocks of companies. The airlines industry reflects a significantly negative sensitivity to oil returns, once with the rise of fuel costs that decrease profitability. A negative trend is noticed in shipping companies, which hold higher bunker fuel expenses. By contrary, oil-producing businesses demonstrate a profitability increase, reacting with statistically significant positive sensitivity. These relationships remain consistent across the high frequency panel estimates, together with the longer horizon annual dynamics. By combining a fixed-effects panel approach with sector interaction terms, the empirical model allows the oil coefficient to differ from one industry to another.