Major global oil traders are snapping up supertankers to anticipate a possible resurgence of crude and product supply gluts caused by the coronavirus pandemic. The tankers are chartered for months as floating storage for unwanted barrels of crude and oil products. This may sound an alarm for OPEC and its allies as the chartering spree suggests that traders are ready for an oversupply after the alliance announced to ease production cuts in August and the following months.
Trafigura in recent days booked about 12 supertankers that can store up to 24 million barrels of oil, shipping industry said. Shell, Vitol, and Lukoil are reportedly among those who also booked tankers to store excess oil.
A collapse in tanker freight rates has made the chartering spree economically viable. Shipping sources said the charter could begin in September and last until December. Some of the tankers will also store refined products such as diesel amid weak demand. The sources also noted that shipowners might be reluctant to sign more multi-month charter contracts on a possible pick-up in the tanker market in the coming months.
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Published on September 14, 2020 6:00 PM (GMT+8)Last Updated on September 18, 2020 9:43 AM (GMT+8)
