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

• Main Authors: Faury, O., Givry, P., Cheaitou, A.
• Other Authors: Kedge Business School (Kedge BS)
• Format: Article in Journal/Newspaper
• Language: English
• Published: HAL CCSD 2020
• Subjects: [SHS]Humanities and Social Sciences; Arctic; Northern Sea Route
• Online Access: https://hal.science/hal-03422199

International audience Navigation via the Northern Sea Route (NSR) requires specific vessels in omparison 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. Navigation via the Northern Sea Route (NSR) requires specific vessels in omparison 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.