Feasibility and implications of the Northern Sea Route choice: The role of commodity prices, in-transit inventory, and alternative operational modes for the oil product tanker market
The feasibility of the Northern Sea Route (NSR) is assessed against the established Suez Canal route (SCR) and the longer Cape of Good Hope route. The analysis reflects real practices of route choice for oil products between the Far East and Europe depending on varying market conditions. A required...
| Published in: | Maritime Policy & Management |
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| Main Authors: | , , , |
| Format: | Article in Journal/Newspaper |
| Language: | English |
| Published: |
Routledge
2022
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| Subjects: | |
| Online Access: | https://orca.cardiff.ac.uk/id/eprint/151702/ https://doi.org/10.1080/03088839.2022.2119613 https://orca.cardiff.ac.uk/id/eprint/151702/1/MPM%20Paper%20-%20Final.pdf |
| Summary: | The feasibility of the Northern Sea Route (NSR) is assessed against the established Suez Canal route (SCR) and the longer Cape of Good Hope route. The analysis reflects real practices of route choice for oil products between the Far East and Europe depending on varying market conditions. A required freight rate (RFR) model is developed based on both optimal speeds and real speeds. Automatic Identification System (AIS) data are used to identify route choice patterns and real speeds of Long Range 2 (LR2) tankers during 2013–2020. Cargo value on-board and alternative fuel types/modes based on oil, and current and future technologies of dual fuel Oil/Liquefied Natural Gas (LNG) are considered. Cape is a competitive alternative under low fuel/commodity prices, and its use is explained, especially during the oil oversupply in 2015–2016 and 2020. The NSR is more competitive when moving towards short-hauls, under high fuel/commodity prices, and discounted or zero icebreaking fees, but is uncompetitive most of the times when ice damage repairs are included in the model. |
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