Value Chains Analysis of Refined Petroleum Products Exporters

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MAGAZINE  №4 (93) August 2019

AUTHORS 

KLOCHKO O.A. 

GRIGOROVA A.A. - Assistant World Economics Department National Research University Higher School of Economics (Moscow, Russia

CATEGORY Analytics and reviews Supply chain management

 

ABSTRACT

Supply chains developed through participation of foreign suppliers exert considerable influence on countries’ insertion into global value chains (GVCs). Close relationship between supply and value chains makes it possible to use statistical data on GVCs to get complex picture of supply chain dynamics in various economic sectors. The ultimate goal of the research is to uncover and explain specifics of supply chains development in leading oil refining exporting countries based on the value-added statistics.

Analysis of countries’ backward participation in GVCs allows to understand development as well as industrial and regional structure of supply chains, into which national producers integrate as buyers of components. Leading oil refining exporters demonstrate different levels of national production dependence on foreign suppliers. The main factor that influences globalization of supply chains is a presence of advanced oil production industry in the country. World leading oil producers, Saudi Arabia and Russia, depend on foreign supplies to a minimum extent. USA, which are currently intensively expanding oil extraction, reduce offshore deliveries of resources. India and the Netherlands with low oil production volumes as well as Singapore and Korea with no oil extraction at all are forced to supply oil and other oil refining components – chemicals, equipment, machinery, from abroad.

Countries’ forward participation in GVCs together with the statistics on origin of value added in final demand allows to conduct analysis of national companies’ participation in foreign producers’ global supply chains as sellers of components. From geographical point of view consumption of oil refining products, supplied by leading oil refining exporters to the international market, is concentrated in the domestic regions of the countries. This fact indicates the regional character of global supply chains. Supplies of oil refining from the Netherlands and Russia show the highest degree of regionalization, while supplies from the USA and India the lowest. The sectoral consumption of oil refining shows similar structure for all analyzed countries – around half of the consumption occurs in international manufacturing sector, about quarter goes to business services sector, significant role in consumption plays global construction industry.

The research results may be used by companies to make strategic decisions on logistics and supply chains, and by governmental bodies to develop measures to regulate foreign operations of national producers. 

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