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

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

Brent barrel

Ice-class

Northern Sea Route

Oil production

Profitability

Tankers

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.

136

Transportation Research Part E: Logistics and Transportation Review

2020-04-01

Faury, Olivier

Cheaitou, Ali

Givry, Philippe

Journal Article

YP4EDZ6A

1366-5545

10.1016/j.tre.2020.101865