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<p>This thesis aims to provide some insights as to how oil prices and oil flows might vary with the carrying capacity of the tanker fleet as affected by political events. It provides an econometric analysis of tanker freight rates in the modern era and proposes a mathematical (quadratic) programming economic model that links the crude oil market to the supply elasticity of the world oil tanker fleet based on a competitive economy. The economic model can be considered as a version of the Walras-Cassel general-equilibrium system which possesses an economically meaningful equilibrium solution in terms of oil prices, freight rates and the pattern of oil distribution. The implementation of the model is completed using the General Algebraic Modeling System (GAMS). The study concludes with a scenario study showing how the model could be used to examine the importance of South East Asia's sealanes in world seaborne oil trade. The model shows the economic vulnerability of oil importing nations, especially Japan, the United States, and Western Europe, to a possible closure of South East Asian sealanes.
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Hong, Kian-Wah</div>
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