Oil Supply Security Research Articles

Brazilian Biofuel Policy: Challenges to Incorporating Socio-Environmental Criteria

Objective: Biofuels have been receiving increasing attention around the world as a result of growing concerns about the security of oil supplies and global climate change. Considering this context, the article aims to analyze the Brazilian biofuels policy (RenovaBio program) in order to propose a summary table of gaps in the consideration of socio-environmental criteria. Method: Qualitative, descriptive research was carried out, supported by secondary data obtained through bibliographical research. Results and Discussion: We found that gaps in the incorporation of socio-environmental criteria in RenovaBio are related to the following topics: traceability of inputs and raw materials; sugarcane agroecological zoning (ZAE Cana), measurement of water footprint consumption associated with traceability of raw materials, measurement of emissions resulting from I-MUT and criteria encouraging E2G. Research Implications: We found that RenovaBio could include the adoption of instruments and practices aimed at agricultural production that are more appropriate to the Brazilian scenario, considering the characteristics of each biome, aiming to include socio-environmental criteria. Originality/Value: The analysis of socio-environmental criteria that are absent or insufficiently included in public policy contributes to clarify the challenges to be overcome in the biofuels production process marked by the agricultural, industrial and distribution phases.

Assessing the vulnerability of oil-dependent countries in Europe

In this article, we attempt to assess the vulnerability of European oil-dependent countries, using the Weighted Russell Directional Distance Model, which provides a composite index and allows for the analysis of adjustments in different proportions for the evaluation factors to reduce oil vulnerability. Our empirical findings show heterogeneous degrees of vulnerability to oil across countries due to country-specific characteristics. More precisely, Slovakia, the Czech Republic, Sweden, France, the Netherlands, and Spain emerged as the least oil-vulnerable countries. Conversely, Hungary, Poland, and Portugal performed poorly regarding oil supply security. Our productivity analysis indicates that inefficient countries that experienced productivity gains primarily achieved them through technological progress, with the Shannon-Wiener index playing a crucial role. These findings align with the EU's strategy of diversifying supply sources.

Economic Policy of Renewable Energy Adoption, Economic Policy of Digital Technology, Human Resource Management, Business Decision

Energy fluctuations and global economic directly hit Indian Subcontinent (Geopolitically, it generally includes the countries of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka) economy and social welfare, which are the net importer of energy sources. This study investigates the relationship between strategic petroleum reserve and welfare losses for Indian Subcontinent. The breakdown of crude oil energy supply has a significant impact on energy security & welfare losses. Oil supply security was quantified in terms of the Indian Subcontinent's oil vulnerability index (which accounts for 84 percent of global oil imports), and welfare losses based on oil supply disruption were calculated. Afghanistan is the most susceptible country in the Indian Subcontinent in terms of energy reserves, as per the composite index results, whereas India is the lowest vulnerable. Empirical findings pointed to a 30% deficit of oil supply as the cause of the most volatile pattern of oil pricing, which exacerbates the estimated welfare loss by a 40% drop in GDP, which is around $700 in the Indian Subcontinent & $9000 in the top oil-consuming countries. According to this analysis, the Indian Subcontinent should keep at least a hundred days' worth of strategic oil resources to avert social and economic losses due to oil price fluctuations.

Assessing the Connectivity Reliability of a Maritime Transport Network: A Case of Imported Crude Oil in China

Crude oil transportation is a vital component of the global energy supply, and the global Crude Oil Maritime Transportation Network (COMTN) plays a crucial role as a carrier for crude oil transportation. Once the network faces attacks that result in the failure of certain routes, a severe threat is posed to the crude oil supply security of importing countries. Therefore, it is crucial to evaluate the reliability of the COMTN. This study proposes a model for evaluating the reliability of the imported COMTN by analyzing the impact of node failures. Firstly, the network is constructed using complex networks (CNs) theory, with ports, canals, and straits as nodes, and shipping routes as directed edges. Secondly, based on the Weighted Leader Rank algorithm, a comprehensive evaluation metric for CNs is established, and a node importance assessment model is developed to rank the nodes accordingly. Thirdly, a case study is conducted using China’s imported COMTN as an example, evaluating the connectivity reliability (CR) under random and deliberate attack scenarios. Finally, measures and recommendations are provided to enhance the CR of China’s imported COMTN. The findings indicate that deliberate attacks pose a greater threat, and reliability varies across maritime routes, with the Americas route exhibiting higher reliability compared to the Middle East and Southeast Asia routes. The results of this study can provide relevant recommendations for policy makers. The model proposed in this study can also be applied to other countries and regions to assess the connectivity reliability of their local COMTNs and develop appropriate measures for the results.

Modeling World Natural Gas and Crude Oil Trade Networks

World energy security is sensitive to stable energy environment and geopolitics that depend on inter-regional energy trade strategies. However, this study uses the network connectedness measures of Diebold-Yilmaz to find the trade cooperation/competition preference for non-renewables' security development. To this end, the dynamic asymmetries of weighted spillover effects of natural gas and crude oil trade flow components are analyzed throughout world trade networks before- and after the sharp fall in crude oil prices. The results exhibit that natural gas and crude oil trade networks experience asymmetric- and time-varying behavior in response to transitory- vs. permanent components as well as positive- vs. negative shocks pre-and post- sharp fall in crude oil prices. Specifically, the natural gas and crude oil trade networks show a lesser degree of integration after 2014. Moreover, the natural gas trade network represents more (less) weighted sensitivity to short-term fluctuations (long-term trend) than the crude oil trade network pre-and post- 2014. As the other comparative result, a higher (lower) degree of integration is detected in the crude oil trade network in response to the positive (negative) shocks compared to the natural gas trade network pre-and post- 2014. Therefore, a lower level of cooperation preference among regions is proposed in the natural gas and crude oil trade networks in response to a sharp fall in crude oil prices. Also, decisions about energy conservation, environmental protection, and protection of strategic resources can affect a region's natural gas and crude oil supply and demand security.

National Security, Security of Supply. Finlandisation as a Diplomatic Practice and the Finnish Energy Dependency on the Soviet Union, 1948–1992

This article examines the intermingling of national security and security of oil supply in Finland through the Finnish oil policy, 1948–1992. During the Cold War, Finland built its oil economy based on Soviet oil instead of diversity and multilateral cooperation. That was closely related to the Finnish overarching Cold War policy that prioritised political and economic relations with the Soviet Union, referred to as finlandisation. The article scrutinises the ubiquitous influence of Soviet relations in Finnish society through the oil policy and shows how finlandisation as a policy strategy transformed into political practice. Two factors explain why Finland became dependent on Soviet oil: the double-coupling of national security and welfare and the quest for stability in Soviet relations. Two factors explain the longevity of Finnish dependency on Soviet oil: the intermingling of oil imports and export revenues and finlandisation as an established pattern of reasoning and decision-making. However, Finland was not a passive actor but managed its oil supply security through extensive socio-technical systems, including infrastructure and relations with other suppliers.

Assessing financial factors for oil supply disruptions and its impact on oil supply security and transportation risks.

The evaluation of energy security offers a standard for policy research and highlights the problems of securing the energy supply. A composite index for analyzing the risk of Southeast Asian nations' oil supply is developed in this study. Indicators used to calculate the index include the import-to-LGE ratio, GPR, market liquidity, gross domestic product, the import-to-consumption ratio, heterogeneity, oil price volatility, US$ volatility, and transportation risk. The index is based on these and other factors. According to the findings, Nepal and Sri Lanka are the most susceptible to oil supply interruptions. This indicates that India is more likely to shift its oil suppliers. At the same time, Maldives, Nepal, and Sri Lanka have the lowest supply risk scores, indicating that they are the most vulnerable to supply disruptions. Reduce the effect of oil supply risk by enacting policies such as the adoption of renewable technologies, nuclear power generation, diversification of exporting supplies, and reducing fossil fuel subsidies.

OIL SUPPLY SECURITY IN CROATIA

The occurrences on the global energy market, increased market instability and the increasingly significant role of geopolitics in energy supply, continually impact the energy supply security which represents the main postulate of the energy politics, as well as a criterion of its successfulness. Assurance of an uninterrupted oil and gas supply is the basic task of each national energy policy. Possibilities and conditions of the supply of primary energy sources, among which oil and natural gas are by far the most important energy sources in relation to their share in energy consumption, and as regards their strategic importance, these represent the basis for assurance of oil and natural gas supply security within the national energy supply. Oil supply security in Croatia is directed towards determining the critical energy supply infrastructure from the viewpoint of energy supply security, towards creating a system for continued oil supply security analysis and monitoring, acting in critical supply situations and towards an elaboration of measures for prevention and amortization in cases of endangerment of energy supply security.

Geopolitical risk and China's oil security

This paper aims to make a comprehensive evaluation of China's oil situation from 2000 to 2018. We establish an evaluation framework from three dimensions of oil supply, oil consumption and oil ecology, and calculate the comprehensive score and scores of three dimensions. Results show that the comprehensive score of China's oil security increased from 0.3 to about 0.6 in 2000–2018. After rapid growth from 2003 to 2008, the oil supply security score stabilized at the level of 0.6. In general, China's oil security situation is steadily improving. Further, ADL-MIDAS model is employed to investigate the impact of four types of geopolitical risks (GPRs) on China's oil security. The findings suggest that GPRs have negative effects on China's comprehensive oil security. In the robustness tests, these effects don't change with adjustments to the assessment framework, changes in subjective weights, or the choice of regression models. The impacts of GPRs on China's oil security are mainly realized through the oil supply dimension. GPRs threatening China's oil security are reflected in oil interruption in the international market. Finally, the paper puts forward several policy implications from the perspective of oil security assessment and GPRs.

The small world of global marine crude oil trade based on crude oil tanker flows

Global marine crude oil trade is a direct reflection of global economic trends. This study uses the real-world historical ship automatic identification system (AIS) data from 2014 to 2017 to explore the flows of crude oil tanker trade between ports and construct a port-node global crude oil trade model. An analysis framework of “AIS data -> crude oil tanker trade flows -> port-node crude oil trade network -> port-node crude oil trade backbone network” is proposed to realize the progressive analysis of global marine crude oil trade. The global port-node crude oil trade network is a small world, in which there are multiple small world port-node trade communities. Compared with the community structure of the global port-node crude oil trade in previous years, the Middle East–Southern Africa–South Asia–Oceania–Asia Pacific community and the Southern Africa–China community have more activities in port nodes and trade links in 2017, which reflects that the Asia-Pacific region, especially East Asian countries, is making efforts to expand the Oceania and African markets and increase the diversity of crude oil import sources to ensure the security of crude oil supply and demand.

Ewolucja bezpieczeństwa energetycznego Polski i Białorusi na międzynarodowym rynku ropy naftowej

Access to energy resources has become one of the main challenges of energy security in the modern world. Due to the growing political instability of countries exporting energy resources, the energy security category should be perceived in a special way. Energy security is expressed, first of all, in stable access to energy resources at an acceptable price. The aim of the article is to determine to what extent the strategy of diversifying the sources of crude oil imports to Poland and Belarus is implemented in practice, and to what extent the implementation of this strategy is conducive to building energy security for both these countries. It seems that despite the similar geological and geographical conditions, as well as the common historical infrastructure heritage, Poland and Belarus shape their energy policy differently. The conducted analysis has an empirical dimension, as the REES index is used to measure the concentration of imports and the short-term risk for the security of crude oil supplies. The article shows that a properly implemented diversification strategy significantly improves the country’s energy security, which is possible due to the use of alternative directions for oil imports to the Russian one.

The global oil supply chain: The essential role of non-oil product as revealed by a comparison between physical and virtual oil trade patterns

Holistic evolution of the global oil supply chain is revealed from both physical and virtual oil use perspectives in parallel, distinctively based on inter-regional physical oil trade by oil products and virtual oil trade embodied in both oil and non-oil products during 2000–2015. Due to strengthening oil resource relocation along the complex supply chain from oil-rich regions to oil-scarce regions, time-series changes of oil use at both ends of the global supply chain present distinct profiles. Non-oil products play ever-increasing important roles in international virtual oil trade, against crude oil and oil products. Virtual oil embodied in non-oil products accounts for more than half of major oil importing economies’ total oil trade (USA: 50%, Japan: 63%, China: 58%, Korea: 61%, Spain: 82%). Global trade relations have been diversifying over time. Physical oil trade by oil products dominates the intermediate trade, whereas virtual oil trade by non-oil products leads the final trade. According to the comparative results under the two perspectives, measures to ensure global oil supply security are provided. A long-term prediction of future national virtual oil use till 2040 highlights the necessity of improving oil use efficiency economically to support society development. To tackle with the effects of non-oil products, market-oriented policies requiring concerted efforts of all the economies along the supply chain are illustrated.

Energy security through FDI: The legacy of Early Japanese Investment in the Oil Sectors of the Persian Gulf

• Japan's FDI in the Middle East energy sectors was backed by strong support by Japanese government, while the objective of the FDI was the enhanced access to energy resources and lower cost energy feedstock. • The FDI was regarded as an important tool to enhance economic and strategic relations between Japan and resource-rich Middle East countries, and some of the FDI is still a significant source of crude oil import in Japan. • But, in a more general context, Japan’ oil supply security has been affected by other more influential factors such as the world oil market situation. • Japan's FDI played a role to enhance relations between Japan and the host countries. But the effect of FDI on the creation of new jobs is limited by the fact that FDI flows strictly targeted the capital-intensive energy sector. • Middle East countries nowadays need to diversify their economic structure in the midst of the ongoing global energy transition. The Japanese government and industry are working hard to promote economic cooperation to such an initiative as “Vision 2030”.

Improving Oil Supply Security: Using a Risk Optimization Model to China and India

In this paper, a risk optimization model is proposed to minimize the oil supply risk from the perspective of diversification. The results show that there is large room for both China and India to improve the oil supply security. China should reduce oil imports from Saudi Arabia and Russia while increasing oil imports from the United States and Kazakhstan. India should import more oil from America and Russia while substantially reducing imports from Iraq and Saudi Arabia. In terms of the regional analysis, the Middle East plays a crucial role in the oil import strategies. They account for almost half of the total oil imports to China and India. African countries provide an alternative choice to diversify their energy supply risks. Based on forecasts of oil demand, we investigate the optimal oil import strategies for both countries until 2030 and 2040. China’s imports from the United States and Kazakhstan are forecasted to increase by more than ten times by 2030. India should import four times as much oil from the United States as it does now and import 10 times more crude oil from Russia. Africa and North America will play a more important role in India’s oil supply security.

Lessons from the Cold War Energy Confrontation

As the engine of modern economies petroleum have played a central role in international relations over the past 120 years. The rivalry over access to and control of oil has been the source of many conflicts in the 20th century. The security of oil supplies at reasonable and stable prices is one of the highest priorities of any government. Energy became too important to be neglected by international relations scholars. The Age of Great Upheaval by Olga N. Skorokhodova takes us back to the period 1970s – 1986 when the two oil shocks shook not only the world economy but also the world politics. Based on hitherto little known documents from Russian and Western archives, this book combines the story of oil sector politics with general Cold War history. The oil crises raised questions about the ability of the United States to ensure access to Middle East oil, heightened concerns about the dangers of Western dependence on Third World resources, and fed fears that the Soviet Union was winning the bipolar confrontation with the capitalist world. Although initially harmed the Western bloc and contributed to the demise of détente, the developments in the 1970s also set in motion changes that led to the end of the Cold War.

Downstream oil supply security in China: Policy implications from quantifying the impact of oil import disruption

Unavoidable disruptions in the international oil supply create heavy pressures on the downstream oil market for oil-importing countries, especially China, whose high dependency on imported oil makes its downstream oil supply security an urgent issue. However, little attention has been paid to the supply security of the downstream oil industry with respect to dealing with import disruptions. Here, an integrated quantitative assessment framework is established to identify the impact of crude oil import disruptions on downstream oil supply security from the supply chain perspective. The dynamic scheduling process of the downstream oil supply chain under 72 import disruption scenarios is simulated by coupling a mathematical programming model with Latin hypercube sampling. The improved grey incidence evaluation method is applied for the comprehensive assessment of province-level and region-level oil product supply security based on the simulation results. The case of 31 provincial-level administrative regions in China in 2017 and 2020 is analysed as an example to demonstrate the framework. We find significant differences among provinces. The southwest and eastern coastal areas of China are vulnerable to potential oil supply disruptions, while the northwest China enjoys high supply security. Based on the results of this paper, policy implications are provided for the Chinese government. The design framework is not case-specific and can be applied for the quantitative assessment of other countries or regions.

Energy, Environment, and Social Development: The Role of R&D in Energy Sustainability - Global Oil and Gas Supply Security and Future Energy Mix

President's column A key component of sustainability is human lifestyle—meeting not just the basics, but for all people to have the opportunity to grow, develop, and prosper. Unquestionably, access to energy is a key component of achieving this goal. Having an adequate, reliable, affordable, environmentally-cleaner and uninterrupted supply of energy is crucial. Despite the calls to immediately cease using fossil fuels, hydrocarbon resources are essential to support the global economy. We cannot achieve a sustainable world in the long term without access to oil and gas. Currently, more than 50% of world energy demand is met by oil and gas. The difficult and yet-to-be-answered questions in the energy industry are the timing of oil and gas depletion and the energy mix afterward. Will oil remain as the primary source of energy at the end of this century, especially in the transportation sector which currently consumes from 75 to 80% of the oil produced? Will gas remain as a primary source of energy for power generation and petrochemicals by the end of this century? Even with renewable energy growing by 400% or more, when will there be enough of these sources to replace oil and gas? Will they be practical for transportation? No one disagrees that oil and gas are depletable energy sources, and that we must find other sources of energy to replace them if mankind’s lifestyle on Earth is to be maintained or improved for hundreds, or I may say, thousands of years to come. However, knowing precisely when this will happen is quite challenging. The oil and gas industry long ago embraced the challenge of finding and producing enough resources to meet growing world demand. Replacing what is produced each year isn’t enough; as demand grows, production capacity must grow, which means discovering more resources. We’ve met that challenge. How? By making enormous investments in research and development (R&D). There is absolutely no doubt that the last few decades’ R&D efforts have reduced uncertainties on the exploration side and have increased recovery efficiency. Thanks to newly developed technologies, fields that were not economically feasible before are now being developed. We’ve learned how to economically and safely produce tight and unconventional resources, and those in hostile environments. All of this has resulted in significant reserves addition and recovery increases.

Integrated evaluation of urban energy supply security: A network perspective

A stable and reliable urban energy supply is essential for supporting sustainable regional and even national development. Further, a general definition and method is necessary to comprehensively evaluate urban energy supply security for different energy resources, identify key problems, and conduct regulations. Therefore, ecological network analysis (ENA) is introduced as a general systematic analysis tool to simulate and assess urban energy supply security, based on the idea that various components related to energy supply exist and interact in a common network. The proposed ENA model was used to evaluate and compare the security of coal, crude oil, and natural gas supplies for Beijing during 1997–2012. The evaluation included overall sustainability assessment, system property analysis, and structure analysis of energy supply systems. The results showed that the coal supply had the highest level of supply security, followed by the crude oil supply and then the natural gas supply. In addition, the crude oil supply system showed the most competitiveness in terms of the energy supply systems’ properties. Scenario analysis yielded suggestions for improving urban energy supply security by maintaining energy production, increasing energy consumption within a certain range, strengthening and diversifying supply sources, and increasing strategic energy reserves. The ENA-based general model provides a useful tool for systematic evaluation of urban energy security from the supply perspective to quantitatively support urban energy management.

A FAREWELL TO KING COAL: GEOPOLITICS, ENERGY SECURITY, AND THE TRANSITION TO OIL, 1898–1917

AbstractInterest in energy transitions has accelerated in recent years due to rising concerns about global warming and resource scarcity, but the drivers of these phenomena are not well understood. To date, scholars have primarily focused on commercial and technological factors, highlighting that oil was ‘better’ than coal – more powerful, cheaper, cleaner, and more practical to use – and that the internal combustion engine made it more advantageous to use in transportation. Yet oil was also a strategic commodity that powerful states sought to acquire for military reasons. This article contends that geopolitics, military decision-making, and energy security hastened the transition from oil to coal prior to the First World War. It argues that Britain, Germany, and the United States sought to transition their naval fleets from coal to oil to gain a military advantage at sea, which created, for the first time, the problem of oil-supply security. Through government-led initiatives to address oil-supply security, vast new supplies of oil came online and prices fell, the ideal environment for oil to eclipse coal as the dominant source in the global energy system.

The Conductive and Predictive Effect of Oil Price Fluctuations on China’s Industry Development Based on Mixed-Frequency Data

Presently, the total supply of crude oil is sufficient, but short-term supply and demand imbalances and regional imbalances still exist. The effect of crude oil supply security and price impact cannot be ignored. As the world’s largest oil importer, China is highly dependent on foreign oil. Therefore, the fluctuation of international oil prices may impact the development of China’s various industries in a significant and differential way. However, because the available data have different frequencies, much of the recent research that addresses the effect of oil prices on industry development need to replace, split, or merge the original data, resulting in loss of the information from the original data. Using the mixed data sampling model (MIDAS(m,K,h)-AR(1)) with the first-order lag autoregressive terms of the interpreted variables, this study builds a mixed data model to investigate the effect of oil price volatility on the output of China's industries. This study expands the extant research by financial market fluctuations and macroeconomic analysis, and at the same time makes short-term predictions on the output of China’s seven main industries. The analysis results show that the mixed data regression model brings the original information contained in different frequency data into the model analysis, and utilizes the latest high frequency data of the explanatory variables to perform real-time short-term prediction of low-frequency interpreted variables. This method improves the timeliness of forecasting macroeconomic indicators and the accuracy of short-term forecasts. The empirical results show that the spot price of international crude oil has a significant and differential impact on the outputs of the seven industries in China. Among them, oil price fluctuation has the greatest impact on the output of China’s financial industry.