Over 100 tankers are estimated to be storing tens of millions of barrels of crude oil at sea, bolstering prospects for players in the sector, the chief executive of leading tanker group Euronav said.
The world continues to struggle with an oil glut due to a drop in demand caused by the coronavirus even after top oil countries have cut production.
Hugo De Stoop, CEO of Belgian group Euronav, said floating storage was “more likely to increase than to decrease”.
“At the moment we continue to be in a world that is oversupplied with oil and the oil has to go somewhere and the land storage is full,” he told Reuters.
Euronav’s fleet currently includes 42 very large crude carriers (VLCCs) – each of which can carry 2 million barrels of oil – as well as smaller suezmax tankers which can each carry 1 million barrels.
De Stoop said 65 VLCCs around the world had been stationary for at least 15 days, indicating they were likely to be storing oil, with a further 38 suezmaxes also holding oil at sea.
He added that five of Euronav’s VLCCs were on contracts with storage options.
Source: Reuters (Reporting by Jonathan Saul; Editing by Jan Harvey)