Winners and Losers of Energy Trade
Energy and Energy-Intensive Products Trade Balance of Top 40 Economies in 2021

Why energy trade is important?

Energy trade significantly impacts economies by affecting their trade surplus or deficit, thus influencing the balance of payments. The extent to which economies depend on energy trade and its consequential impacts are determined by the ratio of trade surplus or deficit to GDP.
   
How Does Energy Trade Affect Economies?

Energy trade encompasses more than just oil, gas, and coal. Energy-intensive products, which consume substantial amounts of energy, also play a significant role in energy trade. Basic metals, chemicals, and mineral products contain high amounts of virtual energy.

Energy prices directly and indirectly influence the prices and trade of energy-intensive and energy-based commodities. Energy is traded both directly through fuels and indirectly through products with high energy content. Some countries benefit from energy trade as they produce energy products and/or energy-intensive commodities such as fuel products, basic chemicals, petrochemicals, and basic metals.

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In terms of energy and energy-intensive products, the top five countries with trade surpluses in 2021 were Russia ($282B), Saudi Arabia ($222B), Australia ($202B), Canada ($103B), and Norway ($98B). Conversely, the top five countries with trade deficits were China ($465B), India ($187B), Japan ($140B), Germany ($93B), and South Korea ($82B). These figures encompass the 40 largest economies in the world, which account for 90% of global GDP and 73% of the world's population. Among these economies, there were 12 with a positive trade balance, 5 with approximately zero balance, and 23 with a negative balance. The 23 economies with negative trade balances accounted for 51% of global GDP and 52% of the world's population.

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Developing countries such as India, Vietnam, Turkey, the Philippines, and Bangladesh face greater challenges concerning energy costs due to their higher trade deficits of energy and energy-intensive products relative to GDP. It is estimated that more than 70% of the world's population (representing 55% of global GDP) is significantly impacted by rising energy prices.

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Note: Energy products encompass mineral fuels (oil, natural gas, and coal), while energy-intensive products include items derived from mineral fuels, basic chemicals, plastics, rubbers, minerals, and basic metals.
Assessing energy trade balances (surplus or deficit) against just exports or imports provides a more comprehensive understanding of economies' dependence on energy trade.