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Efficient Oil Transportation Strategy from Dhahran to Europe

This document outlines a comprehensive oil shipping strategy for transporting 20 million barrels of oil from Dhahran, Saudi Arabia, to Rotterdam, Marseilles, and Naples in Europe. It details two primary shipping routes, their associated costs, and logistical considerations, including using tankers and pipelines. The optimal transport solution incorporates capacity constraints and minimizes overall transportation costs, providing a clear framework to ensure efficient delivery to demand nodes while maintaining supply-node balance.

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Efficient Oil Transportation Strategy from Dhahran to Europe

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  1. 3/4” Comic Sans MS size 44 • First level bullet (size 32) • Second level bullet (size 28) • Third level bullet (size 24) 3/4” 3/4” Footer

  2. Footer

  3. Oil Shipping Example From Bazarra and Jarvis • Transport 20,000,000 barrels of oil from Dhahran, Saudi Arabia to Rotterdam (4 Mil.), Marseilles (12 Mil) and Naples (4 Mil.) in Europe • Routes • Ship oil around Africa to • Rotterdam $1.20/barrel • Marseilles $1.40/barrel • Naples $1.40/barrel • Dhahran -> Suez -> Suez Canal -> Port Said • $0.30/barrel from Dhahran to Suez • $0.20/barrel through Suez Canal • Port Said to • Rotterdam $0.25 • Marseilles $0.20 • Naples $0.15 Footer

  4. Oil Shipping Example From Bazarra and Jarvis • Transport 20,000,000 barrels of oil from Dhahran, Saudi Arabia to Rotterdam (4 Mil.), Marseilles (12 Mil) and Naples (4 Mil.) in Europe • Route 1: ship oil around Africa to • Rotterdam (cost = $1.20/barrel) • Marseilles (cost = $1.40/barrel) • Naples (cost = $1.40/barrel) Footer

  5. Oil Shipping Example Continued • Route 2: Dhahran to Suez then pipeline to Alexandria • $0.15/barrel through pipeline • Alexandria to • Rotterdam (cost $0.22/barrel) • Marseilles (cost $0.20/barrel) • Naples (cost $0.15/barrel) Footer

  6. Oil Shipping Example Continued • 30% of oil in Dhahran shipped in large tankers that can’t go through the Suez Canal • Pipeline from Suez to Alexandria has a capacity of 10 million barrels of oil • Formulate as MCNFP Footer

  7. Network Formulation R PS M S D A N Footer

  8. Network Formulation Continued • Supply Node • Dharhan has a supply of 20 M • Demand Nodes • Rotterdam, Marseilles and Naples have demands of 4 M, 12 M and 4M, respectively • Transshipment Nodes • Suez, Alexandria and Port Said Footer

  9. Arcs Lower bound = 0 for all arcs Upper bound = infinity for all arcs except (S,A) = 10 million (S,PS) = 14 million Footer

  10. LP Formulation for Oil Shipping Example Footer

  11. minimize 1.2 XDR + 1.4 XDM + 1.4 XDN + 0.3 XDS + 0.2 XSPS + 0.15 XSA + 0.25 XPSR + 0.2 XPSM + 0.15 XPSN + 0.25 XAR + 0.2 XAM + 0.15 XAN subject to XDR + XDM + XDN + XDS = 20000000 {D} XSPS + XSA - XDS = 0 {S} XPSR + XPSM + XPSN - XSPS = 0 {PS} XAR + XAM + XAN - XSA = 0 {PA} -XPSR - XAR - XDR = - 4000000 {R} -XPSM - XAM - XDM = - 12000000 {M} -XPSN - XAN - XDN = - 4000000 {N} XSPS <= 14000000 (At most 70% through canal) XSA <= 10000000 ( Pipeline capacity) Footer

  12. Optimal Solution Cost $13,500,000 Arc Flow XDS 20,000,000 XSPS 10,000,000 XSA 10,000,000 XPSR 4,000,000 XPSM 6,000,000 XAM 6,000,000 XAN 4,000,000 Footer

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