Highlights :

 Abstract :
This paper studies the effect of oil prices on the geography of international trade. We model transport costs as a function of variable and fixed costs. By affecting the first cost component, oil prices can then modify the structure of transportation costs across partners. This, we argue, acts as a factor of distortion in relative prices, thereby creating a reallocation of trade at the expense of remote countries. In that respect, an increase in oil prices should favor regionalism.

 Keywords : REGIONALISM | OIL PRICES | GEOGRAPHY | TRANSPORT

 JEL : F15, F19, F20, L91