Determinants of Oil Footprints Embodied in Sino-US Trade: A Perspective from the Globalizing World

Oil plays an important role in global resource allocation. With the continuous development of the global supply chain, trade has brought a great impact on oil consumption. However, few studies have been focused on the oil consumption embodied in trade, that is, the oil footprints. Therefore, based on the multi-regional input-output model and structural decomposition model, this paper investigates the evolution and driving factors of the oil footprint between the two countries with the largest oil consumption in the world (China and the United States). By measuring the flow of oil footprint in bilateral trade, their trade transactions are analyzed at the national and industry levels. The results show that in Sino-US trade, China is a net exporter of virtual oil and the trade surplus is huge. The United States is the main destination of China’s virtual oil consumption exports. In 2004, China’s embodied oil net exports flowing into the US even exceeded its total net exports. Low value-added, high-consumption manufacturing is the main channel for China’s virtual oil to flow to the United States, which reflects that China is still at the bottom of the value chain. The most important factor in promoting exports’ growth is the scale effect of demand, followed by the input structure effect of intermediate products. The technical effect is an important force to curb the growth of oil footprints. This requires China and the United States to accelerate technological progress and reduce energy consumption intensity. At the same time, China should continue to optimize its trade structure, encourage the export of high-value-added products, and strive to climb the global value chain.