Why do oil importers diversify their import sources politically? : evidence from U.S. firm-level data

International politics affects oil trade. But why? We construct a firm-level dataset for all U.S. oil-importing companies over 1986-2008 to examine what kinds of firms are more responsive to change in "political distance" between the U.S. and her trading partners, measured by divergence in their UN General Assembly voting patterns. Consistent with previous macro evidence, we first show that individual firms diversify their oil imports politically, even after controlling for unobserved firm heterogeneity. We conjecture that the political pattern of oil imports from these individual firms is driven by hold-up risks, because oil trade is often associated with backward vertical FDI. To test this hold-up risk hypothesis, we investigate heterogeneity in responses by matching transaction-level import data with firm-level worldwide reserves. Our results show that long-run oil import decisions are indeed more elastic for firms with oil reserves overseas than those without, although the reverse is true in the short run. We interpret this empirical regularity as that while firms trade in the spot market can adjust their imports immediately, vertically-integrated firms with investment overseas tend to commit to term contracts in the short run even though they are more responsive to changes in international politics in the long run.

The effects of international politics on oil-exporting developing countries

International politics affects oil trade. But does it affect the oil-exporting developing countries more? We construct a firm-level dataset for all U.S. oil-importing companies over 1986-2008 to examine how these firms respond to changes in "political distance" between the U.S. and her trading partners, measured by divergence in their UN General Assembly voting patterns. Consistent with previous macro evidence, we first show that individual firms diversify their oil imports politically, even after controlling for unobserved firm heterogeneity. We conjecture that the political pattern of oil imports from these individual firms is driven by hold-up risks, because oil trade is often associated with backward vertical FDI. To the extent that developing countries have higher hold-up risks because of their weaker institutions, the political effect on oil trade should be more significant in the developing world. We find that oil import decisions are indeed more elastic when firms import from developing countries, although the reverse is true in the short run. Our results suggest that international politics can affect oil revenue and hence long-term development in the developing world.

ロシアの中東政策 -- プーチン大統領のシリア政策を通じて

The active initiative taken by Russian President Vladamir Putin by bombarding the antigovernment forces in Syria at the end of September 2015 startled the world by its precalculated boldness. Russian intervention has radically changed the dynamic of the war by empowering the Syrian government of Bashar Assad, and has resulted in a ceasefire agreement which starts on 27th February 2016, led by Russia and the US. No one can predict at present the next stage of conflicts in Syria or whether it will result in a positive solution to the tragic wars there. However, there is no denying the fact that Russia has played an important role in the development of the game. This paper analyzes the motivations of Putin in intervening in the Syrian crisis and the factors which have enabled Russia to play an enlarged role in the Middle East, seemingly beyond its objective capabilities. Legacies of international networks built during the Soviet period; shrewd tactics in making use of the inconsistency and vacillation of US policies, particularly towards the Middle East; its historical experience of interaction with the Muslim cultures, including domestic ones; its geopolitical perception of world politics, and the export of energy resources and military weapons as tools of diplomacy are some of the factors which explain Russian behavior. At the same time, the personal leadership and accumulated experience of President Putin in formulating Russian diplomacy and in manipulating different issues in a combined policy should be taken into account. His initiative in Syria succeeded to some extent in turning world attention away from the Ukrainian issue, aimed at changing the present sanctions imposed by the West. Another phenomenon to be noted in the international arena is the newly developed mutual interaction between Russia and the Arab countries in the Gulf. Frequent visits to Russia by autocratic leaders, including kings, emirsand princes do not always reflect a shared common interest between Russia and the Arab leaders. On the contrary, in spite of sharp and fundamental differences in their attitude toward the issues related to Syria, Iran and Yemen, the Arab leaders find it necessary to communicate with Russia and to know Russia’s expected strategies and intentions towards the Middle East, apart from its oil and gas policies. The Iran deal on the nuclear issue in July 2015 may have been a factor behind the phenomena.