An Updated Assessment of Oil Market Disruption Risks

Phillip Beccue and Hillard Huntington

MPRA Paper from University Library of Munich, Germany

Abstract: The probability of the size and duration of another oil disruption is critical to estimating the value of any policies for reducing the economic damages from a sudden oil supply disruption. The Energy Modeling Forum at Stanford University developed a risk assessment framework and evaluated the likelihood of one or more foreign oil disruptions over the next ten years. The risk assessment was conducted through a series of two workshops attended by leading geopolitical, military and oil-market experts who provided their expertise on the probability of different events occurring, and their corresponding link to major disruptions in key oil market regions. The study evaluated 5 primary regions of production: Saudi Arabia, Other Persian Gulf, Africa, Latin America, and Russian / Caspian States. The final results of the risk assessment convey a range of insights across the three dimensions of magnitude, likelihood, and length of a disruption. These conclusions are net of offsets (e.g., OPEC spare capacity), with the notable exception that the SPR is not included as a source of offsets. At least once during the 10-year time frame (2016-2025), the probability of a net (of offsets) disruption of 2 MMBD (million barrels per day) or more lasting at least 1 month is approximately 80%.

Keywords: Oil supply disruptions; risk assessment (search for similar items in EconPapers)
JEL-codes: Q34 Q41 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-cis, nep-ene and nep-rmg
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: An updated assessment of oil market disruption risks (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:74986

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