U.S. Trade Deficit and the Impact of Rising Oil Prices

Publication Date: December 2008

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Energy; Trade

Type:

Abstract:

Petroleum prices have risen sharply since early 2005. At the same time the average amount of imports of energy-related petroleum products has fallen slightly. The combination of sharply rising prices and a slightly lower level of imports of energyrelated petroleum products translates into an escalating cost for those imports. This rising cost added an estimated $70 billion to the nation's trade deficit in 2005 and could add another $60 to $70 billion in 2006, depending on the course of energy import prices over the remainder of 2006. This report provides an estimate of the initial impact of the rising oil prices on the nation's merchandise trade deficit. This report will be updated as warranted by events.