Abstract
This study aims to estimate the effects of oil price shocks on seaborne trade in Iran; in particular, port throughput of three leading ports through economic fluctuations of three major trading partners of Iran, based on quarterly data for the period of 1999Q2 to 2018Q1. We apply a standard vector autoregressive (VAR) approach using Cholesky decomposition. The results indicate that with increasing oil revenues in short-run, seaborne trade be further directed towards Shahid Rajaei port while rising oil revenues changes the combination of goods handled in Emam Khomeini and Bushehr ports. In the long run, the share of oil price fluctuations in explaining the variations of Shahid Rajaei port throughput is higher than the other two. In fact, increases in oil revenues cause an increase in the volume of industrial and containerized seaborne cargo trade.
Highlights
With the increasing importance of globalization as well as the acceleration of economic integration among different countries, maritime transportation is playing an important role in facilitating global trade
This study aims to investigate the effects of oil price shocks on port throughput in three major ports in Iran through economic fluctuations of its three major trading partners
The sample of trading partners consists of three countries: China, South Korea, and Germany
Summary
With the increasing importance of globalization as well as the acceleration of economic integration among different countries, maritime transportation is playing an important role in facilitating global trade. As stated by the Iran’s Ports and Maritime Organization, between 2017Q2 and 2018Q1 over 156.8 million tons of cargo were loaded and discharged in the ports of Iran, which included 47.7 million tons of petroleum products, 4.4 million tons of liquid bulk, 51.2 million tons of dry bulk, 30.8 million tons of containerized cargo, and 4.22 million tons of general cargo. These demonstrate the vital importance of maritime transportation in the foreign trade of Iran (Iran’s Port and Maritime Organization, 2018). If port authorities wish to establish competitive strategies, and plan and manage logistics as well as transportation infrastructures, they should identify factors affecting port throughput (Kim, 2016)
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