Highlights Sailing though the NSR versus the SCR saves distance, but not always time. OW, 1A and 1AS ice-class vessels do not have the same level of revenue. Ice thickness impacts directly the navigability of the NSR. Brent value and bunker cost impact the choice of the vessel. The best option depends on the strategy based on climate and economic factors.
Abstract 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.
Best maritime transportation option for the Arctic crude oil: A profit decision model
2020-01-29
Article (Journal)
Electronic Resource
English
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