An empirical analysis for the import risk of China#x2019;s petroleum products based on the improved portfolio approach

摘要

This paper explores the relationship between diversification and oil supply security risks, and quantifies the diversification index of China’s petroleum products import during 1994-2006, and analyzes the relationship between the China’s monthly petroleum products import prices and New York Harbor spot prices. Accordingly, we calculate the systematic and specific risk index of China’s petroleum products import over the period 1995–2006 based on the improved risk index model. The results show the improved portfolio risk index model reflects the impact of international oil prices, diversification, imports, and geopolitics factors etc., on oil import risk and its changes, and it is not enough for China to only increase the number of import sources to reduce import risk.