Not all oil-exporting countries are the cracking winners you think.

With headline-dependent oil price hovering at +/-10% around $100 per barrel, the rates market has been rapidly repricing as bond investors continue to analyse the impact of oil on inflation, monetary policy, and trade balances across developed and emerging economies.

The World Bank provides a very useful chart (below) for identifying which countries are net crude oil exporters or importers (or neither). At a high level, it is not hard to form the view that Asia and Europe are the regions most affected by a higher oil price environment.

https://www.worldbank.org/en/programs/global-fuel-pricing-and-subsidy-policies/oil-trade

Some Asian central banks (e.g. Indonesia, and the Philippines) have already started to hike rates, and whilst Asian economies have solid credit buffers overall, the fiscal cost may soon bite after most countries implemented fuel subsidies. The longer-term implications for growth are also yet to be seen, especially given travel restrictions and working-from-home measures. In Europe, most temporary relief measures such as VAT cuts and targeted support have been extended, with fiscal implications for already cash-strapped European governments. The US has mainly released oil reserve to increase supply, with no meaningful household subsidy measures.

On the other end of the spectrum, emerging market economies outside of Asia appear to be net beneficiaries. Not all, however – net oil importers such as Egypt, Turkey and South Africa are facing challenges. But Latin America, the Middle East and Africa contain an overwhelming number of countries either net crude oil exporters or have a balanced imports/exports profile. For instance, Nigeria, Angola, Ecuador, Colombia and Venezuela, have all seen their sovereign bonds outperform since the start of the Iran war, as higher crude prices should support fiscal and external balances.

However, not all net crude oil exporters become winners with rising oil price. Looking beneath the surface, a country’s direct exposure to oil prices is determined by two key factors:

1. The oil trade balance: the net balance between crude imports/exports and refined oil products (gasoline, diesel, kerosene, fuel oil, LPG, etc.) imports/exports. Some countries are large crude exporters but lack sufficient refining capacity to meet domestic demand (e.g. Mexico), whilst others have large domestic refining capacity but remain significant crude importers (e.g. India).
2. Crack spreads, which are the difference in price between oil refined products (e.g. diesel) and crude oil (the raw material). In other words, crack spreads represent refiners’ profit margins. The term comes from “cracking”, the refining process where crude oil is broken down (cracked) into different petroleum products such as gasoline. Crack spreads have increased significantly since the closure of the Strait of Hormuz, as refined product supply response is structurally more constrained than crude. Diesel cracks rose significantly and jet cracks spiked to record highs in March, leading airlines to cancel thousands of flights. While crack spreads have since retreated from their extreme peaks, they remain well above historical levels.

The following chart shows which countries are net oil exporters/importers of refined oil products. This looks very different from the first map. Asia and Europe still appear vulnerable, being net refined oil importers (on top of their net crude importer status), and are clearly among the biggest losers in a higher oil price environment. However, Latin America and Africa are also largely net refined product importers, despite being net crude oil exporters on balance (see chart 1).

https://www.worldbank.org/en/programs/global-fuel-pricing-and-subsidy-policies/oil-trade

When crack spreads widen (i.e. refined product prices grow faster than crude), the imports bill for refined products rise more rapidly than exports revenues, worsening the trade balance. This dynamic is most acute in countries with limited domestic refining capacity and strong growth in transport fuel demand.

Mexico is one of the largest crude exporters in the world, but it spends significantly more to import refined products, resulting in a large oil trade deficit (as per Banxico, $25 billion in 2025 and $6.6 billion in Q1 2026). To a lesser extent, Ecuador, also a net crude exporter, has a large diesel imports bill due to insufficient refining capacity, which significantly reduces its oil trade surplus, i.e. Ecuador does not benefit from higher oil prices as much as its crude exports suggest.

Conversely, the US displays a net positive oil balance, as its large net refined product exports far exceed its relatively small net crude imports. With widening crack spreads, Mexico’s oil trade deficit should widen, whilst the US should become net beneficiary. Therefore, crude exporters/importers do not automatically benefit/suffer from higher oil prices.

While not all crude exporters are winners in the current environment, some countries nonetheless stand out clear beneficiaries, particularly full-chain exporters. Those with an integrated upstream, refining and exports profile benefit from both higher crude prices and widening crack spreads, such as Saudi Arabia and Russia. Geopolitics aside, they are the real “cracking” winners should high oil price persist.