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Matching in the oil tanker industry: implications for energy efficiency

Parker, S; (2014) Matching in the oil tanker industry: implications for energy efficiency. Doctoral thesis , UCL (University College London). Green open access

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Abstract

This thesis seeks to explain the economic determinants of matches between shipowners and oil traders within a spatially explicit market for shipping crude oil. Previous approaches to modeling the tanker shipping market have employed an aggregate approach in which there is a single trade route and one market clearing price. This reduced form of trade ignores the inherently spatial nature of the tanker shipping market in which the matches, market prices, and speed ships travel reflect the demand for shipping crude oil on different trade routes, the supply of ships available in each location, and agents' opportunity costs and future expectations. A matching model of the crude oil spot tanker market was developed in which the characteristics of ships and traders is reflected in the market price. The method employs a matching model to understand how supply equilibrates with demand to determine the set of shipping contracts exchanged and their prices as a function of the other agents in a competitive market. Results described in this thesis show that the contracts that form in equilibrium depend on the demand for oil cargoes in each load area market and the supply of available ships within proximity to the market. Additionally, agents' opportunity costs and future expectations has also been found to influence the matching and contract prices. When ships are differentiated by physical characteristics (including energy efficiency) and location, results show that ships which are the most favored by physical characteristics cannot compete as strongly with less preferred ships located closer to the market. These findings can be used to inform industry stakeholders about strategic operating and investment decisions. They are also useful for environmental policy makers because they explain the key drivers of ship movements given ships' reliance on carbon-intensive fuel for propulsion.

Type: Thesis (Doctoral)
Title: Matching in the oil tanker industry: implications for energy efficiency
Open access status: An open access version is available from UCL Discovery
Language: English
UCL classification: UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Bartlett School Env, Energy and Resources
URI: https://discovery.ucl.ac.uk/id/eprint/1436164
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