The role and importance of logistics in diversifying the risk of import dependence of the Republic of Serbia on oil and petroleum products

Abstract

After the outbreak of the conflict in Ukraine in early 2022, a series of events followed that influenced the change of the international order and the entire geopolitical scene. There has been an economic regrouping and redefinition of interstate relations, and in some countries there has been a deterioration or breakin of relations, and in others there has been a deepening and strengthening of cooperation. Bearing in mind that some are leaders in the export of oil and petroleum products, and some are the biggest importers of the same, the international market of these energy products has changed. This is also indicated by the prices of oil and petroleum products on the international market, as a clear indicator of the changed conditions on the supply and demand side. Securitization of the supply of oil and petroleum products, as well as the prevention of negative-inflationary consequences of price shocks of these energies to internal economic flows implies a strategic approach in supply chain management and logistics. Successfully coping with such challenges implies a multifaceted and synchronized approach by the state or competent entities. First of all, states or entities representing them may sign long-term arrangements on the supply of oil and petroleum products, which cannot be considered an absolute solution in the long term, given the general geopolitical circumstances, but also the practice in bilateral cooperation. Then, states can start the production of oil and petroleum products from conventional-commercial sources, if there are financial and objective-technical conditions for this. The third, and no less important approach, is to create conditions for the exploitation of renewable energy sources, which can help users meet their energy needs. This would reduce the demand for other energy sources, so if the country is imported dependent on fossil fuels, the need for imports would also reduce the import dependence of the country. All three approaches are in the function of diversifying the risk of fuel imports, and if this sphere is not given attention, all economic flows of any oil and petroleum products importing country can be drastically disrupted. There are many examples of mistakes made in the procurement strategy of oil and petroleum products, i.e. gas in the foreground. This paper covers the most interesting examples from practice in order to project the risks and damages that imported countries dependent on oil and petroleum products have faced due to the latest developments in Ukraine. In this paper, the authors also point out the economic aspects that reflect possible directions of diversification of risks from the import of oil and petroleum products, as well as the connection of diversification of import risk with supply and logistics in the Republic of Serbia.

Keywords

• supply of oil and petroleum products
• import dependence
• supply management