Shipping sources said that large-scale oversupply and the surge in Saudi Arabia's supply have caused the freight of very large tankers (VLCC) along the Middle East Gulf to China to jump to about $ 180,000 per day on Monday, up from about 125,000 on Friday The dollar was also higher than Wednesday's weekly low of about $ 90,000. And traders must pay a premium for long-term charter parties.
Increasingly scarce oil storage space
Excess oil spot supply has forced global oil traders to find ways to store oil, including onshore or offshore storage. Although onshore storage space is generally cheaper than offshore storage space, as onshore storage space becomes increasingly scarce, traders are increasingly looking to use oil tankers to store oil. The shipping market is believed to be the imminent flood of oil supplies that will lead to tighter supply of supertankers.
Traders scramble to store oil
As the structure of the oil market shifts to futures trading, traders and oil giants' trading departments are hoping to rent tankers for floating storage. In this market situation, prices in recent months are lower than those in the next few months, which indicates that there is an oversupply of crude oil, making the oil stored for future sales profitable.
Shipping sources say that each ship can carry up to 2 million barrels of crude oil to store crude oil at sea for at least three months to take advantage of the expanding premium market structure, while short-term deliveries are cheaper than those delivered later.
In this case, oil giants and trading companies rent boats to store the oil they produce or buy cheaply from the market, betting that they can resell profits when prices rise.
According to sources, the latest charterers for this month's tankers to store crude oil at sea include Royal Dutch Shell and Glencore.
