Dissertation: Crude Oil Transportation and Tanker Market Dynamics

This dissertation investigates the impact of various crude oil transportation methods on the tanker market, including pipelines, ships, and other modes. It analyzes the effects of these methods on transportation costs, rates, and the overall supply and demand dynamics within the industry. The research explores different stages of crude oil extraction, from upstream to downstream, and examines how pipeline development affects the tanker market. A case study is used to analyze the significance of crude oil on a country's economy, identifying potential business challenges related to extraction and transportation. The study includes a literature review, research methodology, and philosophical approaches. It also offers future recommendations based on findings to improve policies and utilize advanced technology for efficiency and cost reduction in the upstream process. The dissertation aims to offer a comprehensive understanding of the crude oil transportation landscape and its implications.

Dissertation 1
DISSERTATION
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Institution
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Date
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Dissertation 2
Abstract
The main aim of this study is to identify the increasing demand for crude oil and its
impact throughout the tanker market. The study highlights different methods of crude
oil transportation and how they affect the rate and cost of transportation over the
companies. This report will also outline different ways of crude oil extraction i.e. that is
upstream, midstream and downstream. The significance of crude oil and gas is
increasing with the increase in the development of road initiative. The literature review
is conducted to extract additional knowledge of how the impact of pipeline development
increases the demand for crude oil and how it impacts the tanker market and other
transportation companies. The study is implemented over the case study in to analyse
the significance of crude oil over the country’s economy and identifies the possible
challenges that the business could encounter during extraction and transporting of crude
oil due to the increase in demand. The study also illustrates the future recommendations
on the basis of findings and research in order to improve their policies and use of
advanced technology to improve the upstream process and deducting (the rate) of cost
and expenses.
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TABLE OF CONTENTS
Abstract.............................................................................................................2
CHAPTER 1..................................................................................................5
Introduction:......................................................................................................5
Background of the research:..............................................................................5
Aims and objectives of the research:.................................................................6
Research questions:...........................................................................................6
Justification of the research...............................................................................7
CHAPTER 2..................................................................................................8
Research Methodology......................................................................................8
Research Philosophies.......................................................................................9
Research Approach............................................................................................9
Research Method.............................................................................................10
Research Strategy............................................................................................11
Inclusion and Exclusion Criteria.....................................................................11
Research Technique........................................................................................11
Ethical Consideration......................................................................................12
CHAPTER 3................................................................................................13
Literature review.................................................................................................13
Impact of the different modes of transportation of crude oil..........................13
CHAPTER4.................................................................................................15
Literature review:................................................................................................15
The demand for Crude Oil...............................................................................15
Summary.........................................................................................................16
CHAPTER5.................................................................................................17
Literature review:................................................................................................17
Pipeline Impact on Tanker Market..................................................................17
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Summary.........................................................................................................17
CHAPTER6: CASE STUDY......................................................................18
Main Theme....................................................................................................18
Case Study of YJ’s Company Ltd...................................................................18
Licensing.........................................................................................................20
YJ’s Current operation....................................................................................20
YJ Health and safety Environmental issue......................................................20
YJ Financial Cost............................................................................................21
Business Challenges........................................................................................21
Corporate Social responsibility.......................................................................21
Current Situation.............................................................................................22
CHAPTER7: DISCUSSION ON FINDINGS.............................................23
Findings from the case study:..........................................................................23
CHAPTER8: CONCLUSION.....................................................................24
CHAPTER9: FUTURE RECOMMENDATION........................................26
REFERENCE..............................................................................................28
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CHAPTER 1
Introduction:
The proposed study is aimed at investigating as well as analysing the “Impact of
different methods of crude oil transportation on tankers market”. Also, the study is
aimed at evaluating the impact of pipelines on the tanker market while focusing on the
proposed supply and demand at the endpoints of the proposed pipelines. It can be
observed that the demand for crude oil transportation services is a consequential
demand which depends on different external factors such as international trade of crude
oil and the transportation of crude oil from the producer to the consumer region
(McRae, 2017). Therefore, the proposed study is aimed at exploring the crude oil belt
and road initiatives for the crude oil which is referred to the tanker market.
Additionally, it can be stated that the process of getting crude oil to the market includes,
certain transportation as well as the technological storage which is often referred to the
midstream. According to Li et al., (2018, p.374), it can be stated that the oil is produced
in the remote locations which are far from the areas where the oil is being consumed
hence, the transportation of the crude oil needs strategies such as development of
transportation network for crude oil to the refineries, where it is processed to the ships
and refined products which are consumable.
Background of the research:
The crude oil storage facility is used to balance the demand and supply of oil as well as
refined products. Usually, the oil is transported by four options i.e. pipeline, rail, truck
or ship. The transportation by the pipeline is the most common and widely used in
transporting oil. The pipeline is typically used to transport the crude oil from the
wellhead to gathering point as well as from the processing facilities to the tankers
loading facilities.
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According to Regli and Adland, (2019, p.100) the strategy of transporting oil by
pipeline, the technology requires significantly less energy to transport the oil as
compared to transportation by the trucks and rails. The use of pipeline transportation
also has a lower carbon footprint. The trend of the shipment of crude oil by the train had
become a growing phenomenon for the oil reserves all the world. The transportation of
the oil by use of train is preferred because it is cost effective and it is considered to be
convenient for long distance transportation of crude oil, as compared to the
transportation to pipelines transportation. Even though there are many benefits
associated with the use trains there are also set backs which are associated with train
transportation such as, carbon emission, low speed, and accidents.
The transportation of crude oil by truck is a limited method such as by the help of truck
a limited amount of crude oil can be transported. In the transportation of crude oil
transportation by use of trucks, it is considered to be the last option to be used in
transporting oil as well and refined petroleum products. Nevertheless, the transportation
of crude oil by ship is preferred in areas where transportation of crude oil by land is not
suitable. It can be observed that “typically 30,000- barrel tank barge can transport or
carry crude oil equivalent to the amount of crude oil transported by 45 rail tanks, at
about one-third of the cost.” According to the study of Sun et al., (2018, p.174) it can be
stated that the transportation of crude oil by the barges is approximately 25 to 30%
cheap as compared to the transportation of crude oil by pipeline. The setbacks
associated with the transportation of the crude oil by the ships, tanks, and rail are
environmental concerns because the shipment by the barges usually carries natural gas
feedstock to the chemical plants and petrochemicals which can be impacted by the
environmental factors.
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Aims and objectives of the research:
The main aim and specific objectives of this study are:
1. To investigate the impact of different modes of crude oil transportation in the
tanker market.
2. To compare and contrast the advantage and disadvantage of alternative methods
of crude oil transportation.
3. To demonstrate that the pipeline or alternative methods can have a negative
impact, but will not replace the tankers.
4. To analyze future trade rates of the crude oil and its impact on the cost as well as
the supply and demand of the crude oil.
5. To analyze the impact of the environmental policies on the transportation
network and strategies of crude oil.
Research questions:
This research was guided by the following research questions;
1. What is the impact of the different methods of crude oil transportation on the
tankers market?
2. How can the supply and demand for crude oil be managed to the endpoint by the
transportation of oil by pipelines?
Justification of the research
It can be observed that there are various researches which have been conducted to
determine the effective strategies of the transportation of crude oil. The researchers
Vaid and Kar (2016, p.88), stated that the monetary value of the crude oil could be
considered as a consistently fungible commodity which is based on the storage and
transportation of crude oil throughout the market in different locations. Traditionally the
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transport of the crude oil was done by the tankers, or by pipelines to the coastal
refineries, but it was observed that the increase in domestic production of crude oil also
enhanced the capacity of the transportation of the crude oil to the new areas.
Additionally, the study of Yu et al., (2016, p.40) indicated that over the last seven years
the modes of transport of the crude oil had been modified to increase the volume of the
transportation of crude oil. The shortage in the supply of crude oil increases due to the
limitation of the transportations or when the surplus oil is being kept at the storage and
it is not transported to the refineries. In these kinds of scenarios, it can be stated that the
oil is less valuable and the producers have to provide discounts on the price of crude oil
which is relative to prevailing the benchmark price of the crude oil to attract the buyers.
According to the study of Green and Payne, (2017, p. 111), there are certain advantages
and disadvantages associated with different modes of transportation of crude oil from
the producer the consumers. The factors which have a significant impact on the
transportation of crude oil areas the infrastructure of oil transportation mode and the
demand transported oil. Also, the transportation of crude oil by truck and ship can
increase environmental and health-related issues.
Therefore, it can be observed that from the past few decades the transportation of crude
oil is preferred by the pipeline which is cost effective. The shift of the preference
towards the transportation strategy of crude oil by pipeline had a negative impact on the
tankers market such as it had been observed by the producers that the transportation of
the crude oil by the tanker cause an additional increase in cost, as well as transportation
by the tanker, enables the producer to supply a limited amount of the crude oil.
However, the transport of the oil by the pipeline enables the producers to supply the
desired amount of
Crude oil.
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CHAPTER 2
Research Methodology
In this section of the research, the main objective is to describe the research methods,
approaches, philosophies, and techniques that have been utilized in this study. The
methodology is an “unhurried interpretation of strategies” that are associated with the
research. This part of research consists of the theoretical and practical assessment which
is connected with the knowledge division (Vaioleti, 2016). The research section
describes the study path of whether research is going to be primary or secondary. This
part of the research can be separated into two methods of research which are
“quantitative research method and qualitative research method” (Alvesson, and
Sköldberg, 2017).
As the aim of the research is to define the impact of different methods of crude oil
transportation on tankers market. That is the reason qualitative research approach was
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used for this research whereby the researcher collects data from different sources such
as; reviewed journals, peer articles, interviews, observation, and questionnaires. This
research has used qualitative and quantitative information. The research has also used
and analyzed multiple kinds of literature about institutions of education and their
workings (Alvesson, and Sköldberg, 2017). This research has collected data by reliable
as well as credible resources. Forgetting reliable resources, the researcher has used
Academia, Google Scholar, and EBSCO Host. The researcher has ensured the data and
literature collected are referenced and cited properly to the actual researcher or author.
Research Philosophies
Philosophies of research are known as the way to define the mechanism information
used, conducted and analyzed. There are multiple philosophies that can be utilized in
this study and they include realism research philosophy, interpretivism research
philosophy, pragmatism research philosophy and constructivism research philosophy
(Flick, 2015). However, in the following research, researchers have used interpretivism
philosophy of research. The researcher has selected this research philosophy over other
research philosophies because this approach of research allows the researcher to assess
the literature reviews and other secondary methods (Fletcher, 2017).
This research philosophy includes scholars for interpreting the rudiments of research; as
a consequence, Interpretivism uses human interest in this research. Considering that
view, the interpretive espouse of researchers the access towards reality (socially given
or constructed) is solitarily through the social construction means, for example,
instruments, language, consciousness, and shared meanings. Development of
interpretivism philosophy is based on the positivism critique in the social sciences.
Therefore, the researcher has used qualitative and quantitative research; this philosophy
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of research is measured as the most proper method as it focusses on the qualitative and
quantitative analysis (Bresler, and Stake, 2017).
In this research secondary sources of data were used to collect data. This is this because
they are the most appropriate sources for data collection for this research topic. As the
research is related to the topic “alternative methods of crude oil transportation”, so this
can result into best suitable research philosophy as compared to inductive research
philosophy, research philosophy, pragmatism realism research philosophy and
positivism philosophy of research as this philosophy of research helped a researcher for
comprising good insight of domain of topic. Furthermore, this philosophy of research
has helped readers also to assessing literature and results.
Research Approach
In this study, phenomenology approach of research has been used. The researchers
mostly used the phenomenology approach of research because this emphasizes events,
occurrences, and experiences with less disregard or regard for the external and physical
reality (Humphries, 2017). Following research approach might be used for secondary
data collection techniques. There are many advantages associated with the use of this
approach that consists of better knowledge about methods (Kumar, 2019). While using
secondary data collection techniques, researchers can make and generate new theories
after reviews the previous literature. According to Silverman, (2016), there are several
methods for using this approach of research, and it can help the researcher for reviewing
the secondary methods in a much better way. The major reason for using this approach
of research is that it creates a balance within evading undue influence through the
researchers and maintaining an emphasis over the research.
This approach of research defines the philosophical technique that ‘what is perceived
and felt directly is measured as more authentic as compared to explanations or
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interpretations within the communication’ (Mackey, and Gass, 2015). In this approach,
ideas and concepts are formed from opulent data volume by human induction and
interest. Moreover, this research has also considered the perspective of stakeholders.
This research approach includes a better comprehension of meaning attached by the
individuals and the effect it has on the development of new theory.
Research Method
According to Quinlan et al. (2019), researchers can use both quantitative and qualitative
research methods as these methods help the researchers for providing important
information. Method of research that considers both quantitative and qualitative
research methods is considered a mixed research method (Vaioleti, 2016). The mixture
of these methods might provide specific research question all a more thoroughly. With
more information about qualitative and quantitative research, researchers can increase
the qualities and decrease the shortcomings of every separable method (Silverman,
2016). The progression of qualitative and quantitative activities might shift within
mixed methods of strategy. While on another hand, the mixture of these strategies
combination comes about, irrespective of the opportunity, which they might deviate at
the initial look and might supporting the general research plan for surmounting the
individual quarantines of a separate quantitative and qualitative outline (Quinlan et al.
2019).
This research has used secondary research methods. These methods are mainly used for
the data analysis of all type of data including numerical and theoretical gained from
secondary research. The researcher used this method to provide both general and
specific results, which assisted them to increase the results relevancy. This research
method also helped the researcher to increase the results reliability. Through the
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