Oil prices have broken through $90, but these crude oil exporting countries are actually losing money?
2026-06-05 16:52:13
As oil prices fluctuate above $90 a barrel, the bond market is rapidly repricing, with investors continuing to analyze the impact of oil on inflation, monetary policy, and the trade balance between developed and emerging economies.
However, not all oil-exporting countries benefit equally from high oil prices. A country's direct risk exposure depends on two key factors: the oil trade balance (the net difference between crude oil and refined product imports and exports) and the crack spread (the price difference between refined products and crude oil).
According to data provided by the World Bank, Asia and Europe are the regions most affected by the high oil price environment.
Some Asian central banks (such as Indonesia and the Philippines) have begun raising interest rates. Although Asian economies as a whole have a robust credit buffer, the fiscal costs of fuel subsidies in most countries may soon become apparent.
In Europe, most temporary relief measures, such as VAT reductions and targeted support, have been extended, which has had a fiscal impact on already cash-strapped European governments.
The United States primarily increased supply by releasing oil reserves, without introducing any substantial household subsidy measures.
On the other hand, emerging market economies outside Asia are generally net beneficiaries. But not all—net oil importers like Egypt, Türkiye, and South Africa are facing challenges.
Many countries in Latin America, the Middle East, and Africa are either net exporters of crude oil or have a near-balanced import and export situation. For example, sovereign bonds of Nigeria, Angola, Ecuador, Colombia, and Venezuela have outperformed the market since the outbreak of the Iran-Iraq War, as higher crude oil prices should have supported their fiscal and external balances.
However, not all net oil exporters emerge as winners from high oil prices. A country's direct risk exposure is determined by two key factors:
The oil trade balance refers to the net difference between crude oil and refined oil imports and exports. Some countries are large crude oil exporters but lack sufficient refining capacity to meet domestic demand; Mexico is a typical example. Other countries have large domestic refining capacity but still need to import large amounts of crude oil; India falls into this category.
The crack spread is the price difference between refined petroleum products and crude oil, directly reflecting refinery profit margins. Since the closure of the Strait of Hormuz, crack spreads have widened significantly, primarily because the structural constraints on refined petroleum product supply are tighter than those on crude oil. Diesel crack spreads have risen sharply, and jet fuel crack spreads surged to record highs in March, forcing airlines to cancel thousands of flights. Although crack spreads have retreated from their extreme peaks, they remain well above historical normal levels.
When crack spreads widen, the cost of imported refined petroleum products rises faster than export revenues, thus worsening the trade balance. This dynamic is most pronounced in countries with limited domestic refining capacity and strong growth in demand for transportation fuels.
Mexico is one of the world’s largest crude oil exporters, but its spending on imported refined petroleum products far exceeds its export revenue, resulting in a huge oil trade deficit (US$25 billion in 2025 and US$6.6 billion in the first quarter of 2026, according to data from the Central Bank of Mexico).
As a net exporter of crude oil, Ecuador also faces a huge diesel import bill due to insufficient refining capacity, which significantly reduces its oil trade surplus.
In contrast, the United States exhibits a net positive oil balance—its massive net exports of refined products far exceed its relatively small net imports of crude oil. As crack spreads widen, Mexico's oil trade deficit should increase, while the United States should become a net beneficiary. This suggests that neither crude oil exporting nor importing countries automatically benefit or suffer from high oil prices.
In the current environment, not all crude oil exporting countries are winners, but some stand out, especially those with integrated upstream, refining, and export capabilities. Countries with integrated supply chains, such as Saudi Arabia and Russia, benefit from both high oil prices and widening refining spreads. Geopolitical factors aside, if high oil prices persist, they will be the true winners.
The impact of high oil prices is not uniform across countries. While Asia and Europe, as net importers of crude oil and refined products, bear the greatest pressure, not all crude oil exporters will emerge as winners. Countries with insufficient refining capacity (such as Mexico and Ecuador) may face a worsening trade balance due to increased import costs of refined products. The real winners are those countries with integrated capabilities from upstream extraction to refining to export (such as Saudi Arabia and Russia).
However, not all oil-exporting countries benefit equally from high oil prices. A country's direct risk exposure depends on two key factors: the oil trade balance (the net difference between crude oil and refined product imports and exports) and the crack spread (the price difference between refined products and crude oil).
Regional impacts of high oil prices vary.
According to data provided by the World Bank, Asia and Europe are the regions most affected by the high oil price environment.
Some Asian central banks (such as Indonesia and the Philippines) have begun raising interest rates. Although Asian economies as a whole have a robust credit buffer, the fiscal costs of fuel subsidies in most countries may soon become apparent.
In Europe, most temporary relief measures, such as VAT reductions and targeted support, have been extended, which has had a fiscal impact on already cash-strapped European governments.
The United States primarily increased supply by releasing oil reserves, without introducing any substantial household subsidy measures.
On the other hand, emerging market economies outside Asia are generally net beneficiaries. But not all—net oil importers like Egypt, Türkiye, and South Africa are facing challenges.
Many countries in Latin America, the Middle East, and Africa are either net exporters of crude oil or have a near-balanced import and export situation. For example, sovereign bonds of Nigeria, Angola, Ecuador, Colombia, and Venezuela have outperformed the market since the outbreak of the Iran-Iraq War, as higher crude oil prices should have supported their fiscal and external balances.
Rebound Spread: The Key to Determining the Real Winner
However, not all net oil exporters emerge as winners from high oil prices. A country's direct risk exposure is determined by two key factors:
The oil trade balance refers to the net difference between crude oil and refined oil imports and exports. Some countries are large crude oil exporters but lack sufficient refining capacity to meet domestic demand; Mexico is a typical example. Other countries have large domestic refining capacity but still need to import large amounts of crude oil; India falls into this category.
The crack spread is the price difference between refined petroleum products and crude oil, directly reflecting refinery profit margins. Since the closure of the Strait of Hormuz, crack spreads have widened significantly, primarily because the structural constraints on refined petroleum product supply are tighter than those on crude oil. Diesel crack spreads have risen sharply, and jet fuel crack spreads surged to record highs in March, forcing airlines to cancel thousands of flights. Although crack spreads have retreated from their extreme peaks, they remain well above historical normal levels.
When crack spreads widen, the cost of imported refined petroleum products rises faster than export revenues, thus worsening the trade balance. This dynamic is most pronounced in countries with limited domestic refining capacity and strong growth in demand for transportation fuels.
Case Study: The Divergence Between Mexico and the United States
Mexico is one of the world’s largest crude oil exporters, but its spending on imported refined petroleum products far exceeds its export revenue, resulting in a huge oil trade deficit (US$25 billion in 2025 and US$6.6 billion in the first quarter of 2026, according to data from the Central Bank of Mexico).
As a net exporter of crude oil, Ecuador also faces a huge diesel import bill due to insufficient refining capacity, which significantly reduces its oil trade surplus.
In contrast, the United States exhibits a net positive oil balance—its massive net exports of refined products far exceed its relatively small net imports of crude oil. As crack spreads widen, Mexico's oil trade deficit should increase, while the United States should become a net beneficiary. This suggests that neither crude oil exporting nor importing countries automatically benefit or suffer from high oil prices.
The real winner: Exporting countries across the entire industrial chain
In the current environment, not all crude oil exporting countries are winners, but some stand out, especially those with integrated upstream, refining, and export capabilities. Countries with integrated supply chains, such as Saudi Arabia and Russia, benefit from both high oil prices and widening refining spreads. Geopolitical factors aside, if high oil prices persist, they will be the true winners.
The impact of high oil prices is not uniform across countries. While Asia and Europe, as net importers of crude oil and refined products, bear the greatest pressure, not all crude oil exporters will emerge as winners. Countries with insufficient refining capacity (such as Mexico and Ecuador) may face a worsening trade balance due to increased import costs of refined products. The real winners are those countries with integrated capabilities from upstream extraction to refining to export (such as Saudi Arabia and Russia).
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
