« BackNews: Oil Increasingly Being Stored At Sea

Oil Increasingly Being Stored At Sea

With global oil stockpiles climbing, an increasing amount of crude oil is being stored on supertankers at sea, as traders wait for oil prices to increase again.

The Organisation of Petroleum Exporting Countries (OPEC) has been trying to rebalance the oil market, with limited success. Despite OPEC members cutting their output this year, producers in the US and Africa have increased theirs, while demand from Asian nations has also fallen, leading to the glut in supply.

Bloomberg noted that OPEC has tried to cut 1.8 million barrels of oil per day from the market, but that this still hasn’t been enough to lower supply and boost prices.

John Fredriksen, chief executive of tanker firm Frontline, told Reuters earlier this month that he has seen more of the very large crude carriers (VLCCs) on the world’s oceans being contracted for oil storage.

The news provider suggested that as many as ten of these huge tankers have been contracted for this purpose in recent months.

“It sounds correct and the number is rising,” Mr Fredriksen stated, adding: “It’s always an option.”

Citing data from Kpler, Bloomberg revealed that floating storage for oil has climbed by 23 per cent in Singapore this year, and by 32 per cent in the North Sea in the same period.

There is also likely to be demand to bring oil storage onshore if the right facilities are available, with one analyst at JPMorgan Chase & Co telling the news provider that floating storage isn’t a viable option financially if companies are storing oil for three, six or 12 months.

If you operate onshore petrochemical storage, contact us to find out more about our overfill prevention systems.