COVID-19 and the Energy Trade: Evidence from Tanker Trade Routes

30 Pages Posted: 21 Mar 2021

See all articles by Nektarios Michail

Nektarios Michail

Cyprus University of Technology

Konstantinos D. Melas

Metropolitan College, Greece - Faculty of Business and Economics

Date Written: March 19, 2021

Abstract

We employ a cointegration setup to explore route-specific off-equilibrium deviations related to COVID-19 that have affected clean (petroleum products) and dirty (crude oil) tanker freight rates, over and above the expected macroeconomic reactions. We find that the additional deviation caused by COVID-19 is route-specific. In particular, deviation caused by COVID-19 is found to be more significant for clean tankers, given that these products are more reliant on economic developments as a result of their uses. The clean tanker impact is more evident in Japan-related routes, while no specific pattern can be extracted with regards to the additional off-equilibrium COVID-19 deviation for dirty tanker routes.

Keywords: shipping, tanker markets, freight rates, COVID-19, coronavirus

JEL Classification: G11, G12, G13, G20

Suggested Citation

Michail, Nektarios and Melas, Konstantinos, COVID-19 and the Energy Trade: Evidence from Tanker Trade Routes (March 19, 2021). Available at SSRN: https://ssrn.com/abstract=3808177 or http://dx.doi.org/10.2139/ssrn.3808177

Nektarios Michail

Cyprus University of Technology ( email )

Limassol, 3603
Cyprus

Konstantinos Melas (Contact Author)

Metropolitan College, Greece - Faculty of Business and Economics ( email )

74, Sorou St.
Maroussi, 15125
Greece

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