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

• Main Authors: Faury, Olivier, Cheaitou, Ali, Givry, Philippe
• Format: Article in Journal/Newspaper
• Language: unknown
• Subjects: Arctic; Northern Sea Route
• Online Access: http://www.sciencedirect.com/science/article/pii/S1366554518311256

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. Northern Sea Route; Tankers; Ice-class; Profitability; Oil production; Brent barrel;