Petroleum prices rose sharply in the first half of 2008, at one time reaching more than $140 per barrel of crude oil. Since July, however, petroleum prices and import volumes have fallen at a historically rapid pace; in January 2009, prices of crude oil fell below $40 per barrel. At the same time the average monthly volume of imports of energy-related petroleum products fell slightly. The sharp rise in the cost of energy imports added an estimated $28 billion to the nation's trade deficit in 2007 and $120 billion in 2008. The fall in the cost of energy imports combined with the drop in import volumes as a result of the slowdown in economic activity reversed the trend of rising energy import costs and sharply reduced the overall costs of U.S. energy imports for 2008 and for the first two months of 2009. Beginning in March 2009, the import price of petroleum products rose each month through September 2009, the most recent period for data. This report provides an estimate of the initial impact of the changing oil prices on the nation's merchandise trade deficit.