Crude oil trade and green shipping choices

Petroleum fuels the world economy but also burdens the environment due to greenhouse gas (GHG) emissions. Forty percent of annual global crude oil production is transported by ships, which are fueled by residual heavy fuel oil, yet GHG released during transportation is not required to be included in emission reporting for oil and gas companies. We investigate, for the first time, the extent to which oil buyers apply “green” operational practices in their maritime supply chain. We utilize a unique micro-level oil shipment dataset derived from commercial oil market data and the Automated Identification System (AIS) for vessel tracking. Our empirical results highlight the differences between being “green on paper” and “green in practice” and are important for policy makers in the future environmental upgrading of the tanker shipping and oil industry.