Best Maritime Transportation Option for the Arctic Crude Oil: A Profit Decision Model

O. Faury, A. Cheaitou and P. Givry
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O. Faury: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School

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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. © 2020 Elsevier Ltd

Keywords: Brent barrel; Canal routes; cost-benefit analysis; crude oil; decision making; Decision modeling; Egypt; Ice; Ice class; Ice-class; maritime transportation; Maritime transportation; Northern Sea Route; Northern sea routes; oil production; Oil production; Oil-production; Open water; Petroleum transportation; profitability; Profitability; shipping; Shipping lanes; Ships; Suez canal; Suez Canal; Tankers; Transportation routes; vessel; Waterway transportation (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

Published in Transportation Research Part E: Logistics and Transportation Review, 2020, 136, ⟨10.1016/j.tre.2020.101865⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04457124

DOI: 10.1016/j.tre.2020.101865

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