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Falling Crude Prices Dragged Russia’s Trade Surplus in November

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Nov. 20 2020, Updated 12:59 p.m. ET

Russia’s trade surplus fell to $9.1 billion in November

Foreign trade plays a crucial role in the economic development of Russia. According to the Central Bank of Russia, the country’s goods and services surplus fell to $9.1 billion in November 2015 against $13.7 billion a year earlier.

With Russia’s falling trade surplus, Russia-focused ETFs the iShares MSCI Russia Capped ETF (ERUS) and the Direxion Daily Russia Bull 3X ETF (RUSL) have fallen 16.6% and 60.9%, respectively, over the past year as of January 18, 2016.

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Exports plunged 30.5% in November over the previous year

Russia’s exports, which contribute about 28.6% of the country’s gross domestic product, fell 30.5% to $25.5 billion in November 2015 from a year earlier. Russia is a major exporter of energy products such as crude oil, petroleum products, and natural gas.

According to Russia’s Federal Customs Service, exports of energy products accounted for about 68% of Russia’s total export revenue in 2013. Falling crude prices have impacted Russia’s exports adversely. Energy stocks such as Rosneft (OJSCY), Gazprom (OGZPY), and LUKOIL (LUKOY) have fallen 9.0%, 29.4%, and 32.5%, respectively, over the past year as of January 18, 2016.

With the depreciating ruble, imports fell 28.9% in November from a year ago

Year-over-year, Russian imports fell 28.9% in November 2015 to $16.4 billion against $23.1 billion in November 2014. The Russian ruble has depreciated against major world currencies, making the imports of goods and services from these countries costlier. This resulted in a fall in imports.

China and Germany, with trade turnovers of $57.8 billion and $41.9 billion, respectively, ranked as the top trade partners for Russia from January to November 2015.

Falling crude prices, the depreciating ruble, and increasing inflation are affecting the economic growth prospects of Russia. Also, sanctions from the United States and Western nations are still in force, further impacting Russia’s foreign trade.

You may also be interested in reading China’s Trade Surplus Rose in December.

To remain up to date on the economic front, refer to Market Realist’s Global ETF Analysis page.

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