The great oil tanker glut of 2009

oiltankers_off_devon_uk Oil tankers wait off the coast of Devon, U.K. for better times.(Guardian)

In recent years companies have increasingly used oil tankers as floating storage, letting the ships anchor at sea a few weeks or months longer than normal to wait out dips in oil prices. But what used to be a choice is appearing to be the only option for many tankers as global oil demand continues to be low, notes Bloomberg:

A 26-mile-long line of idled oil tankers, enough to blockade the English Channel, may signal a 25 percent slump in freight rates next year.
The ships will unload 26 percent of the crude and oil products they are storing in six months, adding to vessel supply and pushing rates for supertankers down to an average of $30,000 a day next year, compared with $40,212 now, according to the median estimate in a Bloomberg News survey of 15 analysts, traders and shipbrokers. That’s below what Frontline Ltd., the biggest operator of the ships, says it needs to break even.

At the end of November, 168 tankers were storing crude or refined products, according to data from Simpson, Spence & Young Ltd., the article notes. Their combined capacity of 23.8 million tons is equal to 5.9 percent of the tanker fleet and exceeds the previous record, set in 1981, when Japanese refiners used tankers with a combined 19.5 million deadweight tons.