International politics and oil trade: evidence from Russian oil exports.

This article examines the impact of international political relations on crude oil exports from Russia during 1999–2011, using detailed transaction-level data from Russian oil-exporting companies. It finds that worsening political relations between Russia and an oil-importing country cause a significant reduction—about 50% per one-standard-deviation increase in political distance—in Russian oil shipments to that country, with stronger effects for state-owned firms. Despite these declines in specific markets, Russian oil exporters generally maintain stable total export revenues by diversifying sales across multiple countries. Conversely, importing countries, especially those heavily dependent on Russian oil, experience substantial decreases in total oil, natural gas, and overall energy imports following deteriorations in political relations, indicating limited ability to fully substitute lost Russian supplies. The study’s evidence suggests that Russia’s government involvement in the oil sector since 2000, coinciding with Vladimir Putin’s rise to power, plays a key role in using oil exports as a political instrument.