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Structural risk evaluation of global gas trade by a network-based dynamics simulation model

Zhihua Chen, Haizhong An, Feng An, Qing Guan and Xiaoqing Hao

Energy, 2018, vol. 159, issue C, 457-471

Abstract: The uneven distribution of natural gas in the world makes the gas trade between countries close, and the importance of natural gas for national economies leads to a high dependence of gas-importing countries on external natural gas resources. This dependency creates a potential structural risk in the global gas trade that can spread out along trade linkages when parts of the gas trade collapse. In this paper, we developed a simulation model for the diffusion of gas trade ruptures based on a modified bootstrap percolation network model. We used this model to detect the potential gas trade risk and observed the roles of gas trade participants in the risk transmission process. In the results, we found that Norway and Qatar have the greatest impact on price fluctuations in the risk simulation. While Russia's influence ranks lower in the global gas market, although it has larger trade partners. Meanwhile, the external gas supply risk for gas-importing countries varies greatly and shows regional characteristics (European countries are in a higher trade risk environment, while China and Japan have the largest gas supply risk in Asia). We also identified the diffusion paths of gas supply breaks and found that Singapore and India are likely to serve as the largest intermediaries, causing a wide range of trade collapse.

Keywords: International gas trade; Gas supply security; Trade structural risk; Complex network; Bootstrap percolation (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:energy:v:159:y:2018:i:c:p:457-471