A quantitative model of the oil tanker market in the Arabian Gulf

  • Using a novel dataset, we develop a structural model of the Very Large Crude Carrier (VLCC) market between the Arabian Gulf and the Far East. We study how fluctuations in oil tanker rates, oil exports, shipowner profits, and bunker fuel prices are determined by shocks to the supply and demand for oil tankers, to the utilization of tankers, and to the cost of operating tankers, including bunker fuel costs. Our analysis shows that time charter rates are largely unresponsive to tanker cost shocks. In response to higher costs, voyage profits decline, as cost shocks are only partially passed on to round-trip voyage rates. Oil exports from the Arabian Gulf also decline, reflecting lower demand for VLCCs. Positive utilization shocks are associated with higher profits, a slight increase in time charter rates and lower fuel prices and oil export volumes. Tanker supply and tanker demand shocks have persistent effects on time charter rates, round-trip voyage rates, the volume of oil exports, fuel prices, and profits with the expected sign.

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Metadaten
Author:Lutz KilianGND, Nikos K. Nomikos, Xiaoqing Zhou
URN:urn:nbn:de:hebis:30:3-573868
URL:https://ssrn.com/abstract=3759326
Parent Title (English):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 648
Series (Serial Number):CFS working paper series (648)
Publisher:Center for Financial Studies
Place of publication:Frankfurt, M.
Document Type:Working Paper
Language:English
Year of Completion:2020
Year of first Publication:2020
Publishing Institution:Universit├Ątsbibliothek Johann Christian Senckenberg
Release Date:2021/01/05
Tag:VLCC; bunker fuel; crude oil; exports; passthrough; profits; shipping; tanker; time charter; voyage
Issue:March 24, 2020. This version: September 4, 2020
Page Number:34
HeBIS-PPN:475471644
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Sammlungen:Universit├Ątspublikationen
Licence (German):License LogoDeutsches Urheberrecht