Nature Scientific Reports: Oil Supply Disruption Scenarios — Monte Carlo Analysis

Institution: Nature Scientific Reports

Date: Published 2025 (peer-reviewed)

URL: https://www.nature.com/articles/s41598-025-22678-9

File: nature-sci-reports-oil-supply-disruption-scenarios.md

Summary

This peer-reviewed study uses Monte Carlo simulation to evaluate disruption scenarios for downstream oil supply chain resilience and cost minimization. While the study uses a Pakistani fuel distribution network as its case study, its general findings about the impact of supply-side disruptions, demand disruptions, and transport cost shocks on petroleum supply chains are directly relevant to understanding the broader dynamics of an oil supply shock like the Hormuz closure. The study finds that demand-side disruptions cause the largest increase in network costs, while supply-side disruptions are the second most impactful.

Key Findings

1. **Supply-side disruptions cause the second largest cost increase:** Local refineries unable to provide enough products to high-demand regions led to procurement of imported fuel, with distance between high-demand regions and import terminals adding to total network costs. (Nature Scientific Reports, 2025)

1. **Demand-side disruptions cause the largest cost increase:** A 22% surge in overall demand for HSD (High Speed Diesel) and a 32% increase for PMG (Premium Motor Gasoline) was observed in the post-COVID recovery scenario. Rise in demand led to more volume being procured, stored and transported, increasing operational cost. (Nature Scientific Reports, 2025)

1. **Supply reduction scenario:** A decrease in refinery output led to an imbalance in the supply chain. There was a **~42% reduction in HSD production capacity** and a **~40% reduction in PMG production capacity** in the supply disruption scenario. (Nature Scientific Reports, 2025)

1. **Overall cost impact of disruptions:** Disruptions lead to a **45% increase in overall network cost** — from 1,067,342,436 PKR in the deterministic model to 1,553,475,313 PKR under disruption scenarios on average. (Nature Scientific Reports, 2025)

1. **Transport cost disruptions impact less than supply/demand disruptions:** Road carriages showed the highest increase in cost per unit volume, followed by pipeline, then railway. (Nature Scientific Reports, 2025)

1. **Pipeline disruptions have catastrophic potential:** Pipeline is the "backbone" of the downstream oil supply chain; any disruption would have "catastrophic repercussions" for the entire supply network. (Nature Scientific Reports, 2025)

1. **Monte Carlo method:** 50 scenarios generated for each disruption type, using normal distribution to model uncertainty in cost, demand, and production. (Nature Scientific Reports, 2025)

1. **Global energy consumption context:** The study cites the Energy Institute's 2022 data showing global energy consumption of 52,969 TWh, with oil as the "most coveted commodity of the 21st century." (Nature Scientific Reports, 2025)

Entities Mentioned

• **Organizations:** Nature Scientific Reports (peer-reviewed journal), Energy Institute (data source)
• **Places/Countries:** Pakistan (case study region), global context
• **Infrastructure:** Oil refineries, fuel distribution depots, road/rail/pipeline transportation, import terminals
• **Numbers:** 42% (HSD production capacity reduction under disruption), 40% (PMG production capacity reduction under disruption), 22% (HSD demand surge), 32% (PMG demand surge), 45% (overall network cost increase under disruption), 50 (Monte Carlo scenarios per disruption), 52,969 TWh (global energy consumption 2022), 1,067,342,436 PKR (baseline network cost), 1,553,475,313 PKR (disrupted network cost)

Relevance to Q1/Q2/Q3

• **Q1 (Hormuz closure extent):** Medium relevance — the study's framework for analyzing supply disruption magnitude applies directly; documents that even partial disruptions cause ~45% network cost increases
• **Q2 (Price impact):** Medium relevance — the study provides a general model for how supply disruptions propagate through petroleum supply chains and translate into cost increases; demand surges compound supply-side disruptions
• **Q3 (Europe gas/security):** Low direct relevance — primarily an oil supply chain study; the pipeline disruption finding is the most relevant to gas infrastructure risk

Quotes

"Today, the oil industry operates one of the most advanced and intricate supply chains globally... oil's status as the most coveted commodity of the 21st century." — Nature Scientific Reports, 2025

"Disruptions lead to a 45% increase in overall network cost." — Nature Scientific Reports, 2025

"Pipeline function as the backbone of the downstream oil supply chain. Any disruption would have catastrophic repercussions for the entire supply network." — Nature Scientific Reports, 2025

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