Sustainability of oil production: Analysis of macroeconomic shocks using machine learning

This thesis examines the sustainability of petroleum production from geological, economic, and environmental perspectives. As a strategic fossil fuel, petroleum has played a pivotal role in the development of modern industrial economies since the late 19th century. The study begins by exploring the formation, chemical composition, and extraction techniques of petroleum, including conventional and unconventional methods such as hydraulic fracturing. It further analyzes the historical evolution of the global oil industry, including key events such as the 1973 oil embargo, the 1979 Iranian Revolution, and recent geopolitical developments. The economic implications of petroleum are discussed in depth, with special focus on oil-exporting countries, macroeconomic stability, and the concept of the "resource curse." In the context of sustainability, the thesis evaluates petroleum's environmental footprint by comparing its carbon emissions and production costs with those of alternative energy sources. Using life cycle assessment (LCA) and ARIMA-based forecasting, the study provides quantitative insights into country-level sustainability trends from 2000 to 2024, with projections up to 2029. The findings suggest that while petroleum remains a vital energy source in the short and medium term, its long-term viability is increasingly challenged by climate change concerns, technological innovations in renewables, and shifting global energy policies. The thesis concludes with policy recommendations and highlights the need for a balanced energy transition that ensures both economic stability and environmental responsibility. The analyses show that examining oil production over the 2000-2024 period in terms of energy intensity and environmental impacts demonstrates that rent-seeking and resource‐curse effects can be significantly mitigated through robust institutions and policy measures. The findings suggest that with increased integration of renewable energy in the future, the sustainability of oil production will be further strengthened.