Joint Oil Stockpiling between ME Exporters & NEA Importers

About the ProjectSince the oil price shocks of the 1970s, the security of oil supply has been the main concern in academic and policy circles. The goal of this research project is to study the other side of the coin — the security of oil demand from the net-exporters perspective. How do large oil exporters trade off risk and rewards in ensuring security of demand? In the first phase of this research project, a comparative static model of global oil trade is developed to empirically measure the impacts of alternative crude oil market shares across segmented markets; to assess the strategic choice NOCs have in valuing alternative sales market portfolios in the context of the trade-off along the risk-reward frontier; and to compare IOC behavior as a benchmark for NOCs.More specifically, this project will attempt to specify a parsimonious model of regionally segmented global oil trade calibrated to 2012 benchmark data which would allow comparative static exercises to simulate equilibrium impacts of alternative placement of term-contracted crude oil, including impacts on total revenues for crude oil producers. The model focuses on three fundamental variables that determine relative crude oil prices: transport costs, crude oil quality, and refinery flexibilityIn line with KAPSARC’s overall objectives, the intent is to produce policy-relevant insights that help actors in the oil industry understand the consequences of decisions taken by large exporters. The workshop series fits into the overall project by providing a continuing dialogue that raises key issues, provides feedback on current work, and sets future directions. The workshops are an open collaborative forum that enables the discussion of particular themes that feed into identified research questions. Key PointsWhen oil owned and commercially traded by an exporting country is stored in an importing country in exchange for first drawing rights by the host country in times of emergency, that process is known as ‘joint oil stockpiling’. It can thus be classified as both commercial and strategic storage, offering benefits to both parties. The first Middle East (ME)–Northeast Asia (NEA) joint stockpiling deal was concluded in 2006 between Kuwait and South Korea. Since then there have been several similar agreements by which the national oil companies (NOCs) of Saudi Arabia, Kuwait and the UAE have stored crude in in South Korea and Japan. An accord between the UAE and India, concluded in December 2016, is the most recent exampleThe unique character of the joint oil stockpiling agreements between ME exporters and the NEA importers means these can meet two objectives simultaneously: The perceived energy security needs of net oil-importing countries and their objectives of enhancing their respective strategic petroleum reserves at low cost. This is because the oil-importing country does not purchase crude oil up front, but retains the pre-emptive right to purchase the oil in case of an oil disruption emergency.By obtaining free or cheap storage facilities within close proximity to large consuming countries, ME NOCs can take advantage of the flexibility provided by effectively having short-haul crude on offer to both their term contract clients and to other crude oil refiners that are not term clients. Joint oil stockpiling offers a platform for opportunistic access of Asian spot markets, an important consideration for the ME NOCs in the current low oil price environment.Assuming a crude oil price of around $40/barrel (bbl), 5 percent interest cost of carry and an equal division of the carrying cost savings with the host government, the ME NOC could gain $9 to $18 million a year if it enjoyed 50 percent of the cost savings in storing 15-30 million barrels (MMbbl). The host NEA country saves about $2.00/bbl in carrying costs while retaining the pre-emptive right to buy the stored oil during oil supply emergencies. If 15-30 MMbbl are stored, the NEA country would save an estimated $31.5 million to $63 million per year

关于本项目自20世纪70年代石油价格冲击以来，石油供应的安全问题一直是学术界和政策制定者关注的焦点。本研究的宗旨在于探讨问题的另一面——从净出口国视角审视石油需求的保障。大型石油出口国如何在确保需求安全的同时权衡风险与回报？在本研究项目的第一阶段，我们构建了一个全球石油贸易的比较静态模型，以实证测量不同市场分割下的替代原油市场份额对全球石油贸易的影响；评估国家石油公司（NOC）在风险-回报边界上的战略选择，以及以国际石油公司（IOC）的行为作为NOC的基准进行比较。具体而言，本项目旨在制定一个简化的区域分割全球石油贸易模型，该模型以2012年的基准数据为基础，允许进行比较静态实验，模拟不同长期合同原油放置方案下的均衡影响，包括对原油生产者总收入的影响。模型聚焦于三个决定相对原油价格的基本变量：运输成本、原油品质和炼油厂的灵活性。与KAPSARC的整体目标一致，本项目的意图是产出具有政策相关性的洞见，以帮助石油行业参与者理解大型出口国决策的后果。研讨会系列与整体项目相辅相成，通过持续的对话提出关键问题，对当前工作进行反馈，并设定未来的研究方向。研讨会是一个开放的协作论坛，使特定主题的讨论得以进行，这些主题有助于解决已确定的研究问题。要点当出口国的石油和商业交易存储在进口国，以换取东道国在紧急情况下的优先提取权时，这一过程被称为‘联合石油储备’。因此，它可以被归类为商业和战略储备，为双方带来利益。2006年，科威特和韩国达成了第一个中东（ME）-东北亚（NEA）联合储备协议。此后，沙特阿拉伯、科威特和阿联酋的国家石油公司（NOC）已分别在韩国和日本储存原油。2016年12月，阿联酋与印度签订的协议是最近的例子。中东出口国与东北亚进口国之间联合石油储备协议的独特性质意味着这些协议可以同时满足两个目标：净石油进口国的能源安全需求，以及以低成本增强各自战略石油储备的目标。这是因为石油进口国不需要预先购买原油，但保留在石油供应中断紧急情况下的优先购买权。通过在靠近大型消费国的地方获得免费或低成本存储设施，中东NOC可以利用有效提供短途原油所带来的灵活性，这为当前低油价环境下的中东NOC提供了重要考虑。假设原油价格为每桶40美元（bbl），运输成本的5%利息成本，以及与东道国政府平分运输成本节约额，如果中东NOC享受50%的储存15-30百万桶（MMbbl）的节约成本，则每年可获得900万至1800万美元。东道国的东北亚国家在保留在石油供应紧急情况下的优先购买权的同时，可节省约每桶2.00美元的运输成本。如果储存15-30 MMbbl，东北亚国家每年可节省估计为3150万至6300万美元。