Some Management Models On Oil Security And Its Application

Energy is invariably an overwhelming contributor to economic development globally. In order to meet the rapid and sustainable economic development, China requires increasing amounts of oil. In the context of higher oil prices and complex geopolitics, China's oil supply security and national energy security policies are one of the most important issues in energy strategy.This paper combines a number of important scientific issues on China's oil supply security using modern management science theories and approaches; and analyzes the changes in trend of China's oil import risks and rationale, optimal strategic petroleum reserve levels for 2010 to 2020, and optimal strategic petroleum reserve acquisitions under different scenarios. Additionally, this paper compares energy security policies of United States, European Union, and that of China. All these can provide scientific support for China's oil import strategies and strategic petroleum reserve policy decisions.Our main focus of research and improvement is as followings:(1) This paper improves the classical HHI (Hirschman-Herfindahl Index) approach to assess oil import risk. The classical HHI approach assumes that market risks for all goods are exactly the same. But oil is a special commodity due to the impact of geopolitics, transportation and so on, and the import risk of different oil export sources is also different. The import risk is also diverse for different importers from the same export source. So we introduce a risk weight coefficient to the HHI approach. Based on the improved HHI model, we compare an oil import risk index and diversification index for United States, Japan, and European Union with those of China. Consequently, these empirical results are comparable, referenced and instructive for adjusting China's oil import strategies.(2) Based on portfolio theory, this paper quantifies the diversification index, the systematic and specific risks of China's crude oil import over the period 1996-2004. Furthermore, we analyze the change in risk index for different crude oil import scenarios. Because China's crude oil import increased rapidly from 1996 onwards, the impact of crude oil import on the sum totals risk too high to allow identification of the impact of other factors on risk from classical portfolio theory. Thus we improve upon the traditional portfolio theory and develop a risk index model of portfolio theory for...