IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v136y2020ics0301421519306640.html
   My bibliography  Save this article

Downstream oil supply security in China: Policy implications from quantifying the impact of oil import disruption

Author

Listed:
  • Yuan, Meng
  • Zhang, Haoran
  • Wang, Bohong
  • Huang, Liqiao
  • Fang, Kai
  • Liang, Yongtu

Abstract

Unavoidable disruptions in the international oil supply create heavy pressures on the downstream oil market for oil-importing countries, especially China, whose high dependency on imported oil makes its downstream oil supply security an urgent issue. However, little attention has been paid to the supply security of the downstream oil industry with respect to dealing with import disruptions. Here, an integrated quantitative assessment framework is established to identify the impact of crude oil import disruptions on downstream oil supply security from the supply chain perspective. The dynamic scheduling process of the downstream oil supply chain under 72 import disruption scenarios is simulated by coupling a mathematical programming model with Latin hypercube sampling. The improved grey incidence evaluation method is applied for the comprehensive assessment of province-level and region-level oil product supply security based on the simulation results. The case of 31 provincial-level administrative regions in China in 2017 and 2020 is analysed as an example to demonstrate the framework. We find significant differences among provinces. The southwest and eastern coastal areas of China are vulnerable to potential oil supply disruptions, while the northwest China enjoys high supply security. Based on the results of this paper, policy implications are provided for the Chinese government. The design framework is not case-specific and can be applied for the quantitative assessment of other countries or regions.

Suggested Citation

  • Yuan, Meng & Zhang, Haoran & Wang, Bohong & Huang, Liqiao & Fang, Kai & Liang, Yongtu, 2020. "Downstream oil supply security in China: Policy implications from quantifying the impact of oil import disruption," Energy Policy, Elsevier, vol. 136(C).
    • Handle: RePEc:eee:enepol:v:136:y:2020:i:c:s0301421519306640
    DOI: 10.1016/j.enpol.2019.111077
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421519306640
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2019.111077?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yang, Kun & Ding, Yan & Zhu, Neng & Yang, Fan & Wang, Qiaochu, 2018. "Multi-criteria integrated evaluation of distributed energy system for community energy planning based on improved grey incidence approach: A case study in Tianjin," Applied Energy, Elsevier, vol. 229(C), pages 352-363.
    2. Peng, Tianduo & Ou, Xunmin & Yuan, Zhiyi & Yan, Xiaoyu & Zhang, Xiliang, 2018. "Development and application of China provincial road transport energy demand and GHG emissions analysis model," Applied Energy, Elsevier, vol. 222(C), pages 313-328.
    3. Villada, Juan & Olaya, Yris, 2013. "A simulation approach for analysis of short-term security of natural gas supply in Colombia," Energy Policy, Elsevier, vol. 53(C), pages 11-26.
    4. Pan, Lingying & Liu, Pei & Li, Zheng, 2017. "A system dynamic analysis of China’s oil supply chain: Over-capacity and energy security issues," Applied Energy, Elsevier, vol. 188(C), pages 508-520.
    5. Chen, Wenying & Li, Hualin & Wu, Zongxin, 2010. "Western China energy development and west to east energy transfer: Application of the Western China Sustainable Energy Development Model," Energy Policy, Elsevier, vol. 38(11), pages 7106-7120, November.
    6. Wang, Qizhen & Zhu, Yingming & Wang, Yudong, 2017. "The effects of oil shocks on export duration of China," Energy, Elsevier, vol. 125(C), pages 55-61.
    7. Su, Meirong & Zhang, Mingqi & Lu, Weiwei & Chang, Xin & Chen, Bin & Liu, Gengyuan & Hao, Yan & Zhang, Yan, 2017. "ENA-based evaluation of energy supply security: Comparison between the Chinese crude oil and natural gas supply systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 888-899.
    8. Yuan, Chaoqing & Liu, Sifeng & Fang, Zhigeng & Xie, Naiming, 2010. "The relation between Chinese economic development and energy consumption in the different periods," Energy Policy, Elsevier, vol. 38(9), pages 5189-5198, September.
    9. Leung, Guy C.K. & Cherp, Aleh & Jewell, Jessica & Wei, Yi-Ming, 2014. "Securitization of energy supply chains in China," Applied Energy, Elsevier, vol. 123(C), pages 316-326.
    10. Chang, Che-Jung & Li, Der-Chiang & Huang, Yi-Hsiang & Chen, Chien-Chih, 2015. "A novel gray forecasting model based on the box plot for small manufacturing data sets," Applied Mathematics and Computation, Elsevier, vol. 265(C), pages 400-408.
    11. Beccue, Phillip C. & Huntington, Hillard G. & Leiby, Paul N. & Vincent, Kenneth R., 2018. "An updated assessment of oil market disruption risks," Energy Policy, Elsevier, vol. 115(C), pages 456-469.
    12. Wang, Qiang & Li, Shuyu & Li, Rongrong, 2018. "China's dependency on foreign oil will exceed 80% by 2030: Developing a novel NMGM-ARIMA to forecast China's foreign oil dependence from two dimensions," Energy, Elsevier, vol. 163(C), pages 151-167.
    13. Xu, Ning & Dang, Yaoguo & Gong, Yande, 2017. "Novel grey prediction model with nonlinear optimized time response method for forecasting of electricity consumption in China," Energy, Elsevier, vol. 118(C), pages 473-480.
    14. Liu, Dawei & Yamaguchi, Kensuke & Yoshikawa, Hisashi, 2017. "Understanding the motivations behind the Myanmar-China energy pipeline: Multiple streams and energy politics in China," Energy Policy, Elsevier, vol. 107(C), pages 403-412.
    15. Kitamura, Toshihiko & Managi, Shunsuke, 2017. "Energy security and potential supply disruption: A case study in Japan," Energy Policy, Elsevier, vol. 110(C), pages 90-104.
    16. Koike, Masanari & Mogi, Gento & Albedaiwi, Waleed H., 2008. "Overseas oil-development policy of resource-poor countries: A case study from Japan," Energy Policy, Elsevier, vol. 36(5), pages 1764-1775, May.
    17. Mohsin, M. & Zhou, P. & Iqbal, N. & Shah, S.A.A., 2018. "Assessing oil supply security of South Asia," Energy, Elsevier, vol. 155(C), pages 438-447.
    18. Huntington, Hillard G., 2018. "Measuring oil supply disruptions: A historical perspective," Energy Policy, Elsevier, vol. 115(C), pages 426-433.
    19. Zhang, Hai-Ying & Ji, Qiang & Fan, Ying, 2013. "An evaluation framework for oil import security based on the supply chain with a case study focused on China," Energy Economics, Elsevier, vol. 38(C), pages 87-95.
    20. Brouwer, Anne Sjoerd & van den Broek, Machteld & Özdemir, Özge & Koutstaal, Paul & Faaij, André, 2016. "Business case uncertainty of power plants in future energy systems with wind power," Energy Policy, Elsevier, vol. 89(C), pages 237-256.
    21. Austvik, Ole Gunnar, 2016. "The Energy Union and security-of-gas supply," Energy Policy, Elsevier, vol. 96(C), pages 372-382.
    22. Zhang, Yan & Zhang, Jinyun & Yang, Zhifeng & Li, Juan, 2012. "Analysis of the distribution and evolution of energy supply and demand centers of gravity in China," Energy Policy, Elsevier, vol. 49(C), pages 695-706.
    23. Chung, Whan-Sam & Kim, Seung-Su & Moon, Kee-Hwan & Lim, Chae-Young & Yun, Sung-Won, 2017. "A conceptual framework for energy security evaluation of power sources in South Korea," Energy, Elsevier, vol. 137(C), pages 1066-1074.
    24. Sun, Xiaolei & Liu, Chang & Chen, Xiuwen & Li, Jianping, 2017. "Modeling systemic risk of crude oil imports: Case of China’s global oil supply chain," Energy, Elsevier, vol. 121(C), pages 449-465.
    25. Chang, J. & Leung, Dennis Y. C. & Wu, C. Z. & Yuan, Z. H., 2003. "A review on the energy production, consumption, and prospect of renewable energy in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 7(5), pages 453-468, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiaoxiao Hu & Ling He & Qi Cui, 2021. "How Do International Conflicts Impact China’s Energy Security and Economic Growth? A Case Study of the US Economic Sanctions on Iran," Sustainability, MDPI, vol. 13(12), pages 1-21, June.
    2. Wang, Kai-Hua & Xiong, De-Ping & Mirza, Nawazish & Shao, Xue-Feng & Yue, Xiao-Guang, 2021. "Does geopolitical risk uncertainty strengthen or depress cash holdings of oil enterprises? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 66(C).
    3. Zeng, Lanyan & Liu, Shi Qiang & Kozan, Erhan & Corry, Paul & Masoud, Mahmoud, 2021. "A comprehensive interdisciplinary review of mine supply chain management," Resources Policy, Elsevier, vol. 74(C).
    4. Yuan, Meng & Thellufsen, Jakob Zinck & Lund, Henrik & Liang, Yongtu, 2021. "The electrification of transportation in energy transition," Energy, Elsevier, vol. 236(C).
    5. Wang, Kai-Hua & Su, Chi-Wei & Xiao, Yidong & Liu, Lu, 2022. "Is the oil price a barometer of China's automobile market? From a wavelet-based quantile-on-quantile regression perspective," Energy, Elsevier, vol. 240(C).
    6. Yang, Weixin & Pan, Lingying & Ding, Qinyi, 2023. "Dynamic analysis of natural gas substitution for crude oil: Scenario simulation and quantitative evaluation," Energy, Elsevier, vol. 282(C).
    7. Wang, Guotao & Liao, Qi & Zhang, Haoran & Liang, Yongtu, 2022. "How government policies promote bioenergy’s permeability in national-level energy supply chain: A case of China," Applied Energy, Elsevier, vol. 324(C).
    8. He, Shuying & Guo, Kun, 2021. "What factors contribute to the mutual dependence degree of China in its crude oil trading relationship with oil-exporting countries?," Energy, Elsevier, vol. 228(C).
    9. Wang, Deqing & Tian, Sihua & Fang, Lei & Xu, Yan, 2020. "A functional index model for dynamically evaluating China's energy security," Energy Policy, Elsevier, vol. 147(C).
    10. Chen, Sai & Ding, Yueting & Song, Yan & Zhang, Ming & Nie, Rui, 2023. "Study on China's energy system resilience under the scenarios of long-term shortage of imported oil," Energy, Elsevier, vol. 270(C).
    11. Wang, Kai-Hua & Zhao, Yan-Xin & Su, Yun Hsuan & Lobonţ, Oana-Ramona, 2023. "Energy security and CO2 emissions: New evidence from time-varying and quantile-varying aspects," Energy, Elsevier, vol. 273(C).
    12. Yuan, Meng & Zhang, Haoran & Wang, Bohong & Zhang, Yang & Zhou, Xingyuan & Liang, Yongtu, 2020. "Future scenario of China's downstream oil reform: Improving the energy-environmental efficiency of the pipeline networks through interconnectivity," Energy Policy, Elsevier, vol. 140(C).
    13. Xu, Bin & Lin, Boqiang, 2022. "Exploring the spatial distribution of distributed energy in China," Energy Economics, Elsevier, vol. 107(C).
    14. Gong, Xu & Sun, Yi & Du, Zhili, 2022. "Geopolitical risk and China's oil security," Energy Policy, Elsevier, vol. 163(C).
    15. Wang, Kai-Hua & Su, Chi-Wei & Umar, Muhammad, 2021. "Geopolitical risk and crude oil security: A Chinese perspective," Energy, Elsevier, vol. 219(C).
    16. Lu Wang & Shan Li & Chao Liang, 2024. "Exploring the impact of oil security attention on oil volatility: A new perspective," International Finance, Wiley Blackwell, vol. 27(1), pages 61-80, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Zhen & Tang, Yuk Ming & Chau, Ka Yin & Chien, Fengsheng & Iqbal, Wasim & Sadiq, Muhammad, 2021. "Incorporating strategic petroleum reserve and welfare losses: A way forward for the policy development of crude oil resources in South Asia," Resources Policy, Elsevier, vol. 74(C).
    2. Yang, Yang & Liu, Zhen & Saydaliev, Hayot Berk & Iqbal, Sajid, 2022. "Economic impact of crude oil supply disruption on social welfare losses and strategic petroleum reserves," Resources Policy, Elsevier, vol. 77(C).
    3. Ji, Qiang & Zhang, Hai-Ying & Zhang, Dayong, 2019. "The impact of OPEC on East Asian oil import security: A multidimensional analysis," Energy Policy, Elsevier, vol. 126(C), pages 99-107.
    4. Matsumoto, Ken’ichi & Shiraki, Hiroto, 2018. "Energy security performance in Japan under different socioeconomic and energy conditions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 90(C), pages 391-401.
    5. Gong, Chengzhu & Gong, Nianjiao & Qi, Rui & Yu, Shiwei, 2020. "Assessment of natural gas supply security in Asia Pacific: Composite indicators with compromise Benefit-of-the-Doubt weights," Resources Policy, Elsevier, vol. 67(C).
    6. Mohsin, M. & Zhou, P. & Iqbal, N. & Shah, S.A.A., 2018. "Assessing oil supply security of South Asia," Energy, Elsevier, vol. 155(C), pages 438-447.
    7. Xiaolei Sun & Jun Hao & Jianping Li, 2022. "Multi-objective optimization of crude oil-supply portfolio based on interval prediction data," Annals of Operations Research, Springer, vol. 309(2), pages 611-639, February.
    8. Wang, Kai-Hua & Su, Chi-Wei & Umar, Muhammad, 2021. "Geopolitical risk and crude oil security: A Chinese perspective," Energy, Elsevier, vol. 219(C).
    9. Long Zhang & Wuliyasu Bai, 2020. "Risk Assessment of China’s Natural Gas Importation: A Supply Chain Perspective," SAGE Open, , vol. 10(3), pages 21582440209, July.
    10. Lu, Hongfang & Xu, FengYing & Liu, Hongxiao & Wang, Jun & Campbell, Daniel E. & Ren, Hai, 2019. "Emergy-based analysis of the energy security of China," Energy, Elsevier, vol. 181(C), pages 123-135.
    11. Gong, Xu & Sun, Yi & Du, Zhili, 2022. "Geopolitical risk and China's oil security," Energy Policy, Elsevier, vol. 163(C).
    12. Zhenyu Zhao & Huijia Yang, 2020. "Regional Security Assessment of Integrated Energy Systems with Renewables in China: A Grid-Connected Perspective," Sustainability, MDPI, vol. 12(24), pages 1-18, December.
    13. Li, Jinchao & Wang, Lina & Lin, Xiaoshan & Qu, Shen, 2020. "Analysis of China’s energy security evaluation system: Based on the energy security data from 30 provinces from 2010 to 2016," Energy, Elsevier, vol. 198(C).
    14. Chen, Han & Yang, Lei & Chen, Wenying, 2020. "Modelling national, provincial and city-level low-carbon energy transformation pathways," Energy Policy, Elsevier, vol. 137(C).
    15. Chen, Sai & Zhang, Ming & Ding, Yueting & Nie, Rui, 2020. "Resilience of China's oil import system under external shocks: A system dynamics simulation analysis," Energy Policy, Elsevier, vol. 146(C).
    16. Su, Huai & Zhang, Jinjun & Zio, Enrico & Yang, Nan & Li, Xueyi & Zhang, Zongjie, 2018. "An integrated systemic method for supply reliability assessment of natural gas pipeline networks," Applied Energy, Elsevier, vol. 209(C), pages 489-501.
    17. Geng Wu & Yi-Chung Hu & Yu-Jing Chiu & Shu-Ju Tsao, 2023. "A new multivariate grey prediction model for forecasting China’s regional energy consumption," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(5), pages 4173-4193, May.
    18. Yeqi An & Yulin Zhou & Rongrong Li, 2019. "Forecasting India’s Electricity Demand Using a Range of Probabilistic Methods," Energies, MDPI, vol. 12(13), pages 1-24, July.
    19. Dulal Halder & Anshuman Gupta, 2019. "Overseas equity oil development for augmenting energy security: Study of the critical factors in Indian context," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 0(2), pages 75-97.
    20. Chen, Sai & Song, Yan & Ding, Yueting & Zhang, Ming & Nie, Rui, 2021. "Using long short-term memory model to study risk assessment and prediction of China’s oil import from the perspective of resilience theory," Energy, Elsevier, vol. 215(PB).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:136:y:2020:i:c:s0301421519306640. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.