New Players Drive US and Russia Oil Demand and Supply Post War

The Ukraine-Russia war drastically altered the global trading landscape with the impact being visibly largest on the US-Russia trade dynamics. As the US imposed various sanctions on Russia and continues to do so, the volume of trading exchange between the two countries dropped significantly. While the US imports from Russia fell by 71%, US exports to Russia came down by 83%.

In an attempt to better gauge the trade partnership scenario between US and Russia post-war, we examined the trade statistics for Petroleum Oil (HS Code 2079), the top item among Russia exports to the US. With the data and insights fetched from Trademo Intel, we will depict the impact of the war on this specific Russia export item and what the potential road to recovery looks like.

The State of Petroleum Oil Trade in the US and Russia (2021-22)

Due to the ongoing tensions between the two countries, trading activities stood at an all-time low. However, the import of petroleum oil to the US and export of the same from Russia continued to steadily grow. Many reasons can be attributed to this trend in the particular sector given the geopolitical disruptions happening around. The two images below depict the growing trend of petroleum imports and exports for the US and Russia respectively.

As per the latest trade data fetched from Trademo Intel, the imports of petroleum oil to the US from countries around the globe grew by 47% during the period 2021-22. The same growth trend was seen for the export of petroleum oil from Russia globally grew by 28% during the same period. It is noteworthy how the growth trend for US Imports and Russian exports of petroleum oil has continued into the most recent years.

Current Players Importing Petroleum Oil to the US

As the US-Russia trade landscape destabilized due to the war, the US turned to other players in the field for fulfilling its petroleum requirements. While the US imports from Russia of petroleum oil crumbled down to nearly ceasing altogether at the beginning of 2022, countries like Canada and Mexico emerged as the top exporter of petroleum to the US. While petroleum exports to the US from Canada have grown by 34%, Mexico's exports to the US for the same item have risen by an impressive 154%.

The huge increase in imports coming from Mexico can be considered a result of Nearshoring, a recent trend that involves moving production or sourcing of goods closer to the final consumer market. Nearshoring can be seen as holding the potential to shape the future of US imports of petroleum and other goods in the near future.

Other Countries Russia Exports Petroleum Oil From Now

US sanctions and seizure of imports from Russia due to the war impacted the trade dynamics between the two countries but not Russia’s worldwide trading stature. Despite Russia receiving the ire of many countries due to its stand in the war, its trading exchanges continued to flourish with plenty of countries still. Speaking of petroleum oil, Russia’s exports to many other countries including India, China, and Italy grew at astonishing rates of 689%, 42%, and 150%, respectively, compared to the imports before the war.