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Article

Energy Security and Portfolio Diversification: Conventional and Novel Perspectives

1
Department of Economics, University of Perugia, 06019 Perugia, Italy
2
Visiting Energy and Macroeconomic Program, KAPSARC, Riyadh 11672, Saudi Arabia
3
Visiting Energy Markets Program, KAPSARC, Riyadh 11672, Saudi Arabia
*
Author to whom correspondence should be addressed.
Academic Editor: Pierre Desrochers
Energies 2021, 14(14), 4257; https://doi.org/10.3390/en14144257
Received: 19 May 2021 / Revised: 28 June 2021 / Accepted: 12 July 2021 / Published: 14 July 2021
(This article belongs to the Special Issue Economic Development and Energy Policy)
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. View Full-Text
Keywords: oil exports; GCC countries; energy security; portfolio optimization; risk diversification oil exports; GCC countries; energy security; portfolio optimization; risk diversification
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MDPI and ACS Style

Bollino, C.A.; Galkin, P. Energy Security and Portfolio Diversification: Conventional and Novel Perspectives. Energies 2021, 14, 4257. https://doi.org/10.3390/en14144257

AMA Style

Bollino CA, Galkin P. Energy Security and Portfolio Diversification: Conventional and Novel Perspectives. Energies. 2021; 14(14):4257. https://doi.org/10.3390/en14144257

Chicago/Turabian Style

Bollino, Carlo A., and Philipp Galkin. 2021. "Energy Security and Portfolio Diversification: Conventional and Novel Perspectives" Energies 14, no. 14: 4257. https://doi.org/10.3390/en14144257

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