The fossil energy trade relations among BRICS countries

Abstract

This paper analyzes the competitiveness and bilateral trade complementarities of BRICS countries (i.e., Brazil, Russia, India, China, and South Africa) with respect to their fossil energy trade and explores the reasons for changes in fossil energy complementarities. By introducing the logarithmic mean divisia index (LMDI) method, this study links the revealed comparative advantage (RCA) index with the trade complementarity index (TCI), attributing the change in complementarities to export and import revealed comparative advantages associated with both sides. The results show that, in the coal trade among BRICS countries, China’s competitiveness is declining annually while Russia shows an opposite trend. The cooperation between China and Russia has steadily expanded in the crude oil trade. Although India and Russia are highly complementary in the crude oil trade, its drivers are not stable. Finally, in the natural gas trade among BRICS countries, Russia always has a stable and outstanding supply capacity.