Geopolitical Risk and the LNG-LPG Trade-Reference-Cited by-同舟云学术

Geopolitical Risk and the LNG-LPG Trade

Published:2022-08-16 Issue:3 Volume:28 Page:243-265
ISSN:1554-8597
Container-title:Peace Economics, Peace Science and Public Policy
language:en
Short-container-title:

Author:

Michail Nektarios A.¹,Melas Konstantinos D.²³^ORCID

Affiliation:

1. Economic Analysis and Research Department , Central Bank of Cyprus, School of Economics and Business and Cyprus University of Technology , Thessaloniki , Greece

2. Department of Economics , University of Western Macedonia , Kastoria , Greece

3. Faculty of Business and Economics and Metropolitan College , Thessaloniki , Greece

Abstract

Abstract We explore the relationship between Liquified Natural Gas (LNG) and Liquified Petroleum Gas (LPG) carrier freight rates and global geopolitical risk, while also controlling for the macro environment. Our results show that a shock in geopolitical risk significantly increases the cost of the spot charter rates for both LNG and LPG carriers, with the impact reaching around 25% for the former and 18% for the latter. Our results bear significant implications for both the companies and the countries involved in the liquefied gas trade, with its importance growing as the use of this energy source is likely to continue substituting other fossil fuels in the future.

Publisher

Walter de Gruyter GmbH

Subject

Management, Monitoring, Policy and Law,Political Science and International Relations,Economics and Econometrics,Sociology and Political Science

Link

https://www.degruyter.com/document/doi/10.1515/peps-2022-0007/pdf

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