Ships able to carry 2m barrels chartered for $335,000 a day to store oil unwanted during the Covid-19 pandemic
Giant oil tankers are being used to hold record amounts of crude at sea due to a global oversupply that threatens to overwhelm the world’s storage facilities.
A record 160m barrels of oil has been stored in “supergiant” oil tankers outside the world’s largest shipping ports following the deepest fall in oil demand in 25 years because of the coronavirus pandemic.
The so-called “supertankers”, which can each hold up to 2m barrels of oil, are in high demand by oil traders as conventional oil storage facilities have quickly filled up with oil left unused during the coronavirus lockdown.
The last time floating storage reached levels close to this was in 2009, when traders stored more than 100m barrels at sea before offloading stocks when the economy began to recover.
Charter rates for giant vessels that can be used to store oil have more than doubled in the last month to reach highs of $350,000 (£280,000) a day as traders scramble to find space for crude that cannot be sold on to refineries.
Shipping experts told the Reuters news agency that 60 supertankers have been chartered to store oil, mostly off the coast of Singapore and in the US gulf coast, as well as smaller crude oil tankers.
The number has climbed quickly from between 25 and 40 super-large vessels at the start of the month, and 10 in February. The amount may triple in the coming months to fill up to 200 supertankers, according to the shipping experts.