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Article: Tankers to the rescue again: a solution to storage woes
News & Insights 16 June 2020
The current crisis in oil prices coupled with the fall in demand has pushed several oil producers, traders and consumers to stock up, leading to a shortage in storage space for oil. Members are seeking guidance for using tankers for the storage of oil in the current climate, as a solution to these storage issues. This article shares lessons learnt from previous claims and offers practical and operational considerations.
The oil industry has been through several cycles since weathering the price collapse of 2014. In 2020, the industry has been hit with two new phenomena almost simultaneously: oversupply (caused by the failure of negotiations between Saudi Arabia and Russia to agree on production cuts) and a demand shock (reflecting the economic impact of the Covid-19 lockdown).
This current crisis in oil prices coupled with the fall in demand has pushed several oil producers, traders and consumers to stock up, leading to a shortage in storage space for oil, not just crude but even clean products such as aviation fuel and gasoline.
Using tankers for the storage of oil in the current climate is one solution, and the club is seeing an increasing number of inquiries where members, both charterers and owners, are seeking guidance for such operations. This article is based on the club’s experience, highlighting a number of lessons learnt from previous claims, and offering practical and operational considerations to assist our members in their planning for using tankers for storage.
The full PDF article is available to view and download on the right.
Category: Loss Prevention