EconPapers    
Economics at your fingertips  
 

Modeling world oil market questions: An economic perspective

Olivier Durand-Lasserve and Axel Pierru ()

Energy Policy, 2021, vol. 159, issue C

Abstract: The choice of a modeling approach is driven by the oil policy or market question that needs to be addressed. We provide the non-modeling community with insightful information on oil market models, shedding light on the economic interpretation of technical aspects (such as the meaning of the costs associated with certain types of constraints), but without introducing any mathematical formulations. We also emphasize the reasonings and assumptions underlying the modeling structures and solutions proposed in the literature. We first review how models have usually represented market fundamentals. We then examine recent modeling developments addressing market issues (such as the impact of the shale oil revolution and the shift in producers’ behavior) and policy questions (such as the use of spare capacity to stabilize prices, the lifting of export controls, and the management of uncertainties surrounding the energy transition) that have emerged since the Great Recession. Moreover, given that climate policies increase the interdependency of all energy markets, we discuss how long-term multi-fuel models produce scenarios for oil as part of the global energy mix. We also suggest ways to tackle questions not yet covered by the oil market modeling literature, such as the dependence of government budgets on oil revenues.

Keywords: Equilibrium models; Market structure; Energy transition; Oil price (search for similar items in EconPapers)
JEL-codes: C61 L13 Q35 Q41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421521004729
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:159:y:2021:i:c:s0301421521004729

DOI: 10.1016/j.enpol.2021.112606

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-09-14
Handle: RePEc:eee:enepol:v:159:y:2021:i:c:s0301421521004729