Facebook LinkedIn Twitter
Shop

IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

Long-Term Contracts for Crude Oil imports into Costa Rica: A General Equilibrium Analysis

Abstract:
Energy is critical for all human activity. Many countries import a major proportion of essential energy resources such as oil, for which the ability to substitute alternative inputs is difficult in both the short and long run. A possible response to the prospect that energy prices can fluctuate is for governments to negotiate long-term contracts with suppliers to mitigate sudden price shocks. This strategy is, however, not cost-free. It is equally rational for suppliers to negotiate high prices which protect them from the prospect of having to supply their oil at a lower price than they could anticipate in the future. A country seeking long-term protection from unstable oil prices via long-term contracts, therefore, faces higher current prices.

Purchase ( $25 )

Energy Specializations: Petroleum – Markets and Prices for Crude Oil and Products; Energy Access – Energy Poverty and Equity

JEL Codes:
L13 - Oligopoly and Other Imperfect Markets
Q56 - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

Keywords: Oil imports, Long-term contracts, Costa Rica, GE analysis

DOI: 10.5547/ISSN0195-6574-EJ-Vol10-No1-10


Published in Volume 10, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.