Work

Geopolitical Risk and the LNG-LPG Trade

Year: 2021

Type: article

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.

Source: Peace Economics Peace Science and Public Policy

DOI: 10.1515/peps-2022-0007

Authors: Nektarios A. Michail, Konstantinos D. Melas

Institutions: Central Bank of Cyprus, Cyprus University of Technology, University of Western Macedonia

Language: English

Topic: Market Dynamics and Volatility

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $2,366