George Magnus makes an important point. If the oil surplus is rising and Asia’s surplus isn’t falling …

If the oil exporters current account surplus is rising, and oil-importing Asia’s surplus isn’t falling (thanks to China and Japan), then either the US or the European deficit has to be growing.   Global balance and all. 

Up through 2005, though, almost all the deterioration has come from the US.  Magnus:

However, the distribution of the oil shock has been more uneven. The US has borne the brunt of the decay in external balances. Europe’s position has remained stable while Asia’s has actually strengthened. Thus, global imbalances are being exacerbated by petrodollar developments to the disadvantage of the US. 

Fortunately, the oil exporters seem quite willing to hold their surplus in (offshore) dollars, and thus finance the US.    Russia is a bit of an exception, keeping only 50% of its reserves in dollars.  But 50% of a big number is still a big number. Russia's reserves, incidentally, are up about $11b in the first eleven days of August.  Some of that is valuation and capital inflows, but most of it comes from oil and gas exports.  A chart tells the same story.

My “oil exporting regions” are Africa, the Middle East and Russia.  That leaves out Venezuela and Norway, so it understates the global oil surplus.   

But the basic idea is still pretty clear.  The oil surplus is rising.  Asia's surplus is not fallin, and perhaps even rising.  And until recently, most of the offsetting increase in the world's current account deficit came from the US.

There are some signs that this pattern may be changing.   Import growth in Europe this year has been very, very strong --  strong enough to offset very strong European export growth.  Eurozone goods imports are up 18% y/y.   EU-25 goods imports are up 20% y/y (January-June 06 v. 05).  US goods imports are only up 13.3% or so.   And EU/ eurozone imports from China are actually growing faster than US imports from China.   Go figure.