Dependency network of international oil trade before and after oil price drop

Highlights: • PMI is firstly used to detect oil trade dependency at country and world levels. • Changes of dependency during the oil price shock from 2014 to 2017 are analyzed. • Dependency between the USA and its major trading partners changed considerably. • Russia's dependence on major trading partners decreased and then recovered. • There are 5 dependency communities with a similar number of countries in 2017. An unexpected price drop beginning in 2014 has resulted in significant changes in the global crude oil market. This paper investigates the dependency network of the international oil trade and focuses on its changes after the oil price drop. Point-wise mutual information is used to quantify oil trade dependencies, and complex network methods are applied to analyze dependencies at both the country and world levels. The results show that the USA has constructed stable friendships with peripheral countries, and its dependency on traditional oil-producing areas in the Middle East and Africa has decreased significantly. The dependency between Russia and its major partners has undergone a U-curve; it decreased significantly from 2014 to the first half of 2016 and then recovered in late 2016 and 2017. India and its major import sources maintained a stable high dependency during the research period. Community analysis of the dependency network shows structural differences between 2014 and 2017. Large countries such as the USA and Russia changed their community after 2014. The results show that the global oil trade relationships changed considerably after 2014. The new features of dependency and its implications should be considered by policy makers and company managers.