Balance of Trade

Oil Price needed to balance trade (per barrel in $)

Qatar 77
Kuwait 78

Microeconomic Factor
UAE
Iraq
Saudi Arabia
81
101
104
Russia 105
Venezuela 118

Impacts of Oil Price Nigeria

Algeria
123
131
Iran 131
Libya 184
0 20 40 60 80 100 120 140 160 180 200

Price($)

➢ Heavily Oil-export dependent countries reduce trade deficit on increase in

oil price
➢ OPEC members are not all equal while facing price fluctuations
➢ On the other hand, OPEC sometimes deliberately reduce oil price for
policy reasons.
 Balance of Trade
➢ Oil price hike generally tends to reduce economic growth
➢ Indirect effects on manufacturing, transportation, heating etc. where oil is

Microeconomic Factor
an input
➢ Huge cost payments for import induces trade imbalance
➢ On the contrary, a fall in oil price will reduce the current account deficit of
Impacts of Oil Price oil importers.
➢ 1% increase in oil price means 0.34% to 0.38% decrease in Trade balance
for South Asian countries.(Hassan, Syeda Anam & Zaman, Khalid, 2012)