Crude oil trade and current account deficits: replication and extension

Andrew Musau and Steinar Veka
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Steinar Veka: Inland Norway University of Applied Sciences

Empirical Economics, 2020, vol. 58, issue 2, No 20, 875-897

Abstract: Abstract Huntington (Energy Economics, 50, 70–79) explores the association between oil trade and a nation’s current account balance using a sample of 91 countries observed over the years 1984–2009. Differentiating exporters from importers, he finds that net oil exports are significant in explaining current account surpluses but net oil imports do not explain current account deficits. We successfully replicate this result after expanding the sample of countries by two-fifths and increasing the time frame to include recent periods of high volatility in oil prices. Furthermore, we investigate differences in the oil trade–current account association between countries grouped in terms of income per capita as well as the association between oil trade and the different components that constitute the current account. Our results reveal a positive association between net oil export balance and the trade balance component but no association with the non-trade balance component, suggesting the dominance of the former.

Keywords: Current account; Oil trade; Cross-country analysis (search for similar items in EconPapers)
JEL-codes: F14 F32 Q43 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s00181-018-1522-8

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