A Bayesian Risk Assessment of the Saudi Arabian Oil Supply Chain, 2001-2010

Abstract

The thesis assesses risks to the Saudi Arabia oil supply chain employing Bayesian methodology. The geopolitical impact of the 9/11 terrorist attacks on the World Trade Centre introduced potential new risks to the Saudi oil supply chain. The thesis will identify a series of risks and determine the likelihood and magnitude of potential disruptions the threats could cause. Thorough testing is undertaken employing Bayesian methodology.

Bayesian methodology assists in discounting implied, overstated and misplaced threats. Data is collected from a number of various sources including current academic literature, experts in the shipping, security and oil field services industry. The data is arranged and the results tested in order to reveal live or benign threats to the Saudi oil supply chain.

Final analysis reveals that there are six major threats to the Saudi oil supply chain, dwindling skilled ex-pat workers, terrorism, new tanker design, a closure of the Strait of Hormuz, Saudi internal instability and developments in technology. The six threats are cross referenced and analysed at depth to determine whether they would individually or combined have a significant disruptive impact on the Saudi oil supply chain.