Best maritime transportation option for the Arctic crude oil: A profit decision model

Olivier Faury, Ali Cheaitou and Philippe Givry

Transportation Research Part E: Logistics and Transportation Review, 2020, vol. 136, issue C

Abstract: Navigation via the Northern Sea Route (NSR) requires specific vessels in comparison with the Suez Canal Route (SCR). We develop a profit decision model that defines the best option mixing the shipping lane (NSR or SCR) and the ice-class of the vessel (1A, 1AS, and Open Water (OW)) for oil producers operating in the Russian Arctic zone. The effects of the Brent barrel price, bunker cost and ice-thickness are analyzed. The best option depends in fact on the strategy implemented by the shipper. For instance, the solutions of a profit focused strategy or of a cost-oriented strategy are different.

Keywords: Northern Sea Route; Tankers; Ice-class; Profitability; Oil production; Brent barrel (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (10)

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DOI: 10.1016/j.tre.2020.101865

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