The Strategist

Oil Vendors Are Asked to Deliver Their Oil Slower

01/29/2016 - 08:07

The world's largest oil companies are asking oil tankers suppliers to deliver oil more slowly because of difficulties with unloading large amounts of oil in the ports of transshipment, Bloomberg reported citing Europe's largest owner of supertankers.

For example, tankers with transport volume of 2 million barrels of oil go at a speed of about 24 km/h - 27.8 km/h, explains Paddy Rodgers - owner of the company Euronav, operates the largest tanker fleet in the EU.

In this case, moderation of a tanker’s speed increases the oil delivery from 40 to 48 days.

Huge supplies of oil and the inability of harbors to quickly handle them in the near future will increase demand for storage of oil in huge tankers that are used by some countries a long-term storage of purchased crude oil.

According to the International Energy Agency (IEA), the stocks in the countries belonging to the Organization for Economic Cooperation and Development reached a record 3 billion barrels.

In coastal China, the average waiting time for tankers standing for unloading has reached about a week, though it is usually passed to earlier discharge without delay, says Rogers.

Irregular periods of downtime of waiting oil tankers are observed in the Middle East, too. The infrastructure for oil transportation cannot cope with large volumes.

"I have not seen this in of oil supply," - said Rogers, who’s been working on the market since 1996. In 2014, the company doubled its revenues.