Impact Of Arctic Oil Development On The World Oil Market

Since the emergence and rapid development of the oil industry，the economiclandscape of the world has undergone tremendous changes. As an important nationalenergy supplies, oil is the black gold which protects national security andsocio-economic development. As a big oil importer, China must pay close attention tothe dynamic world oil market.As Arctic warming makes a lot of melting glaciers, rich oil resources and greatpotential to start a new channel in the Arctic has become a hot topic, meanwhile alsobecome one of the greatest dynamic in the world oil market. From the perspective of amarket, any changes of relevant product will lead to market feedback. Once the Arcticoil be large-scale exploited and transported out through the Arctic waterway, theremust have a certain impact on present world oil market. Therefore, this paper selectsArctic oil exploration and the world oil market as the research objects, and exploreswhat kind of impact will the exploration and circulation of Arctic oil have on the oilmarkets on earth.The paper includes three core parts. The first part focuses on the analysis of thecompetitiveness of the Arctic oil development and also its advantages anddisadvantages. Through the application of Michael Porter’s Five Forces Model，thispart analyzes unique competitive that Arctic oil possess from five aspects——presentworld oil reserves and production and distribution，costs of Arctic oil exploration anddistribution，future market space of Arctic oil，potential of the world’s oil newexploration，market share of the alternative energy.On the basis of the first part conclusions, the second part explores the impact of therealization of Arctic oil transportation process on the configuration of the world’s oiltrade seaborne. This part of study is mainly supported by the Location Theory. First itanalyzes seaborne patterns of oil import separately for China, the United States,Europe and Japan, and sketches the inwardly-reducing curves for each area. And thenby using a reverse cost ratio approach, it calculates the changes of the amount of oilthrough each water-way. Finally, conclusions of each area are integrated, and this part points out that oil development in the Arctic will largely reshape the pattern of theworld’s oil seaborne configuration. Additional inference is that total global seaborneoil trade will account for30.5%of world oil trade (including sea, land, pipes, etc.)The third part mainly focuses on oil prices. From part to overall, from a microcosm ofthe United States to a global simulation, using the classical cointegration regressiontheory, from a single independent variable to multiple variables, this part meticulouslyanalyzes the impact of Arctic oil development on the world oil prices. Analysis pointout that in the long run, the Arctic oil development would affect oil prices, but in theshort term, the readjustment of the Arctic oil development on oil price fluctuations issmall. Furthermore, the results of the multivariate model also show that with theincreasing amount of oil in the Arctic, its high mining costs have a trend to increaseoil prices. And as long as OPEC organization and the world oil reserves did not haveenough reverse trend，world oil price tends to be presented a spiral upward trend.Finally, this paper gives several specific recommendations on our energy security inface with the Arctic oil development. Three aspects are mainly included, they arediversification of oil import sources, seeking of the Arctic partners as well asconstructing and perfecting the oil futures market.About innovation of this paper, one is reflected in the choice of the research object.Arctic oil development itself is a new study. Though, there are many domestic andforeign research materials, but research on the fields of economic and trade is verylacking. The second innovation is reflected in research methods. Make the firstquantitative study of the Arctic is indeed a bold attempt, which will provide a newway to study other resources of the Arctic. The third is reflected in the conclusions.The description of the three core parts above has specifically addressed thoseconclusions, and will not be repeated here again.