This feels like stepping back in time to the Russia-Ukraine conflict, as the euro area trade balance returns back to deficit territory again now. The €1.0 billion deficit (unadjusted) in April comes after a surplus of €4.9 billion in March.
Compared to April last year, exports were seen up by 5.0% but imports were seen up by a whopping 9.3% in April this year. So, that sees a drop compared to the surplus of €8.7 billion in April 2025.
Looking to the January to April numbers, the year-to-date trade balance this year is at €12.9 billion. Meanwhile, it was €63.7 billion during the same period in 2025.
The deficit in April largely stems from a widening deficit in energy (€28.8 billion in April compared to €24.0 billion in March). Raw materials also posted a deficit of €3.0 billion with narrower trade balances in other categories as well. The part on energy isn’t surprising as a result of higher prices due to the Middle East conflict.
It was the case back in 2021-22 and once again this time around.
The seasonally adjusted reading still shows a narrow surplus of €1.3 billion but the trend is relatively clear. And that is the euro area trade balance is leaning more towards deficit territory as the Middle East conflict rages on.
The US-Iran deal this week will do some good in terms of helping with market sentiment. And the good news is that North Sea crude prices have also dropped significantly. Hence, physical prices are at least reflecting closer to what the trend in the futures market.
That being said, this relies on the reality with the Strait of Hormuz needing to follow with what is promised by the US-Iran deal in the coming months
