The article examines how oil shocks impact countries' external balances from 1975 to 2004. The researchers look at the trade balance, current account, and net foreign assets of various countries, including the US, Euro area, Japan, oil exporters, and middle-income oil importers. They find that the effect of oil shocks on trade balances and current accounts depends on how non-oil trade balances respond, and this varies between the US and other oil importers. Additionally, they discover that oil shocks lead to valuation effects on net foreign assets for major oil exporters and the US, which can be cushioned by increased international financial integration.