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International politics and oil trade: evidence from Russian oil exports

Author

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  • Sergey Mityakov
  • Margarita Portnykh
  • Kevin K Tsui

Abstract

Oil is often considered a “political” good affected by the changes in international political relations. Using a novel dataset on Russian oil-exporting companies over 1999–2011, we find that a worsening in political relations between Russia and an oil-importing country results in a considerable reduction in oil shipments by Russian oil exporting firms into that country, the effect being stronger for state-owned firms. Using leadership changes in oil importing countries as exogenous shocks to political relations, we show that this relationship is causal. However, total exports revenue of Russian oil exporting firms is not affected much, as they seem to be able to recover losses incurred in one market by increasing their sales in other markets. At the same time, the countries importing oil from Russia (especially the ones heavily dependent on Russian oil) see their total oil and energy imports decline.

Suggested Citation

  • Sergey Mityakov & Margarita Portnykh & Kevin K Tsui, 2023. "International politics and oil trade: evidence from Russian oil exports," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 39(3), pages 642-681.
    • Handle: RePEc:oup:jleorg:v:39:y:2023:i:3:p:642-681.
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    File URL: http://hdl.handle.net/10.1093/jleo/ewad005
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    More about this item

    Keywords

    political relations; trade conflicts; oil exports;
    All these keywords.

    JEL classification:

    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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