Falling crude oil prices likely to improve Poland's trade deficit with Russia

The rapid decline in world crude oil prices may lead to a multi-billion dollar reduction in Poland's trade deficit with Russia. Between 80% and 90% of Russia's revenues from trade with Poland are derived from sales of crude oil and natural gas. Poland's trade deficit with Russia began to grow in 1999, as a result of a slump in Polish exports and the rapid growth of fuel prices worldwide. Poland meets 60% of its crude oil needs with imports from Russia, while 90% of its overseas purchases of natural gas come from Russia. Increases in the international prices of crude oil and gas in 2000 led to the cost of Polish imports from Russia rising by as much as $1.9 billion. However the spiralling fall in crude oil prices in the wake of the September 11 attacks on the US have brought about the shrinking of Poland's trade deficit with Russia, with Gazeta Wyborcza suggesting that the fall may be sufficient to compensate for last year's $1.9 billion increase in the surplus. (Gazeta Wyborcza, p. 25) P.W.