ABSTRACT
The study uses the VEC model approach to analyse the influence of peak oil on the geography of international trade, thereby using the example of steel exports to the United States between 1998 and 2008. The hypothesis tested is that peak oil leads to increasing oil prices and international transport costs and subsequently to the regionalisation of international trade flows at the cost of long-distance trade. Steel exports to the United States are analysed for 23 European and 9 North American countries. The findings suggest that following an oil price shock, steel export volumes decrease for countries/regions geographically distant to the United States and increase for countries/regions geographically close to the United States. The evidence also indicates the significant explanatory power high oil prices have for steel exports to the United States. The findings are in line with economic trade theory emphasising the importance of the distance of trade and indicate that due to peak oil, trade globalisation, at least in the steel industry, may be at risk.
