###### Abstract  
The downstream sectors of the hydrocarbon industry in the Middle East are growing quickly. Due to their geographical locations, they need to transport products from manufacturing plants at one port to other hub ports for international shipping, forming complex closed-loop shipping systems. Such domestic shipping systems are also typical logistics structures in many energy and heavy industries near coastal regions. The operations in such systems are frequently lagging due to uncertainties, such as weather and unexpected events, and the lack of effective management techniques. More reliable and efficient systems require a better vessel operations management policy than one based on a first-available-first-use policy and constant voyage speed. This study develops a detailed and realistic simulation model to evaluate the economic and environmental performance of a closed-loop vessel shipping system, considering various uncertainties from weather and port operations. Furthermore, the optimization model has been incorporated into the simulation model to prescribe the optimal number of vessels and voyage speed to minimize the total costs. A new vessel dispatching policy, large-vessel-first-use, has been proposed and compared with the first-available-first-use policy using the developed model. Increased use of large vessels and slower voyage speeds significantly benefited the total costs and environmental effects. The optimal solution presented the potential to save 26.8% of the total cost and reduce greenhouse gas emissions up to 39% compared with the current operating condition. closed-loop shipping; simulation; optimization; operating policy; petrochemicals 29 July 2021 2021  
above a critical level, vessels cannot start to travel or may need to decrease speed if they were already at sea [2]. In addition, low visibility increases the risk of collision between vessels and obstacles. Some common causes of reduced visibility include fog, mist, smoke, heavy rains, and bright flashes from reflected sunlight [3]. A visibility distance of less than one nautical mile is hazardous as it reduces a vessel's ability to sail safely, and a visibility distance of less than half a mile implies that vessels should not leave port [4]. Moreover, green shipping management has become a vital topic in the shipping industry. The shipping industry is responsible for a significant environmental footprint as it accounts for 2.7% of global CO\({}_{2}\) emissions [5]. The International Maritime Organization (IMO) issued the Global Sulfur Cap 2020 regulation to limit sulfur oxide emissions for ships to below 0.5% compared to the previous limit of 3.5% [6]. The IMO also aims to reduce greenhouse gas (GHG) emissions by at least 50% by 2050 compared to 2008 [7]. Regulatory changes related to GHG emissions and waste discharge have generated more pressure for the shipping industry, requiring better environmental performance [8]. Many studies used simulation tools to address various issues and facilitate and improve related cargo shipping systems in the oil and gas industry and other industries. [PERSON] and [PERSON] (2004) addressed a global crude oil transportation model using simulation [9]. They also formulated a design and control problem as a Markov decision process incorporating uncertainties such as travel time and crude demand. Using Bayesian simulation techniques, [PERSON] et al. (2005) [10] studied the impact of ferry service expansions, considering uncertainties such as the arrival times of vessels. [PERSON] et al. (2006) [11] combined a template modeling with simulator-style development to yield a customized template for petrochemical supply chain operations, characterizing the downstream supply chain elements, including refineries and transportation modes. [PERSON] and [PERSON] (2012) [12] analyzed the risk of three different alternatives for improvement, such as increasing vessel arrival, deepening the river, and using larger vessels. Further, [PERSON] et al.