The notion of energy security in most interpretations includes the physical supply and price affordability components, making financial risks a crucial part of energy security strategies. Mainstream analysis has focussed on the notion of the physical supply. This paper introduces a novel approach, considering simultaneously the quantity of oil imports and the risk associated with this quantity. This approach applies the financial portfolio theory to explore these issues from the perspective of four major Asian energy importers: China, Japan, Korea and Taiwan, by estimating efficient frontiers for corresponding oil import portfolios. Results show that the composition of oil import portfolios determines varying risk levels for given oil import growth rates and average import prices. Scenario analysis suggests that increasing the Saudi Arabia share of oil imports improves the portfolio performance of China and that the impact of the Iranian oil export embargo would increase portfolio risk of the economies in focus within a 3–15% range.
The Effects of a Shock to Critical Minerals Prices on the World Oil Price and Inflation
The notion of energy security in most interpretations includes the physical supply and price affordability…
1st November 2023
World Oil and Critical Mineral Study: A Global VAR Analysis
The notion of energy security in most interpretations includes the physical supply and price affordability…
26th September 2023
