LAPSE:2023.33678
Published Article
LAPSE:2023.33678
Energy Security and Portfolio Diversification: Conventional and Novel Perspectives
Carlo Andrea Bollino, Philipp Galkin
April 21, 2023
Despite the recent expansion of the scope, the main pillars of energy security remain physical supply and price components. This paper highlights the novel developments of this notion, including the exporters’ perspective, relevant challenges, indicators, and policies. Furthermore, we apply the portfolio theory approach to five Gulf Cooperation Council countries to construct portfolios representing the trade-offs between maximizing returns (oil export growth or export prices) and minimizing risks (standard deviation of return variables). We assess portfolios’ resilience to external demand and logistical shocks by running several disruptive scenarios. We find that oil exporters adopt a balanced approach to the risks associated with export volume growth and pricing, which is different from some major oil importers that prioritize either the physical supply or price stability. Simulation scenarios of increasing oil exports to China would have a significant impact mainly on Saudi Arabia and the United Arab Emirates (UAE), but not on the others, while scenarios of reduced oil exports to the United States would impact mainly Saudi Arabia and Kuwait. A blockade of the Malacca Strait would reduce export volumes and increase portfolio risks for all five economies, with Kuwait and Oman most affected.
Keywords
energy security, GCC countries, oil exports, portfolio optimization, risk diversification
Suggested Citation
Bollino CA, Galkin P. Energy Security and Portfolio Diversification: Conventional and Novel Perspectives. (2023). LAPSE:2023.33678
Author Affiliations
Bollino CA: Department of Economics, University of Perugia, 06019 Perugia, Italy; Visiting Energy and Macroeconomic Program, KAPSARC, Riyadh 11672, Saudi Arabia [ORCID]
Galkin P: Visiting Energy Markets Program, KAPSARC, Riyadh 11672, Saudi Arabia
Journal Name
Energies
Volume
14
Issue
14
First Page
4257
Year
2021
Publication Date
2021-07-14
Published Version
ISSN
1996-1073
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Original Submission
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PII: en14144257, Publication Type: Journal Article
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LAPSE:2023.33678
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doi:10.3390/en14144257
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Apr 21, 2023
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CC BY 4.0
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