Investigating Import Determinants of Russian Crude Oil: A Gravity Model Approach

Russia is a major global exporter of crude oil. Due to its unique geographic, political, and economic factors, Russia's crude oil exports exhibit distinct characteristics compared to those of other oil-exporting countries. This study aims to identify the key factors influencing Russia's crude oil trade and analyze their impact on this trade. Using a gravity model, the study utilizes panel data on crude oil imports from 31 major importers from 2007 to 2022. Regression analysis integrates macroeconomic, logistical, and geopolitical variables to determine the influencing factors of Russia's crude oil trade. The regression analysis reveals that GDP, Brent crude oil prices, EU membership, and direct pipeline connections positively affect crude oil imports from Russia. Conversely, trade distance, the Logistics Performance Index (LPI), and the imposition of sanctions on Russia negatively impact crude oil imports. These results effectively reflect the characteristics of Russia's crude oil trade. Russia's economy is heavily dependent on energy exports, and its trade focuses more on historically established energy trade relationships rather than market-driven exports. Additionally, recent years have seen a gradual shift in crude oil supply towards new markets, a trend that is also reflected in this study.