Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129204
Authors: 
Langer, Lissy
Huppmann, Daniel
Holz, Franziska
Year of Publication: 
2016
Series/Report no.: 
DIW Discussion Papers 1548
Abstract: 
The upheaval in global crude oil markets and the boom in oil production from shale plays in North America have brought scrutiny on the export ban for crude oil in the United States. This paper examines the global flows and strategic refinery adjustments in a spatial, game-theoretic partial-equilibrium model. We consider de- tailed supply chain infrastructure with multiple crude oil qualities (supply), distinct oil products (demand), as well as specific refinery configurations and modes of transport (mid-stream). Investments in production capacity and infrastructure are endogenous. We compare two development pathways for the global oil market: one projection retaining the US export ban, and a counterfactual scenario lifting the export restrictions. Lifting the US crude ban, we find significant expansion of US sweet crude exports. In the US refinery sector, more heavy sour crude is imported and transformed. While US producers gain, the profits of US refiners decrease, due to reduced market distortions and a more efficient resource allocation. Countries importing US sweet crude benefit from higher product output, while avoiding costly refinery investments. Producers of heavy sour crude (e.g. the Middle East) are incentivised to climb up the value chain to defend their market share and maintain their dominant position.
Subjects: 
energy system model
crude oil market
US crude export ban
refining capacity
infrastructure investment
JEL: 
Q41
Q47
Q48
C61
Document Type: 
Working Paper

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