The Covid-19 lockdown demand disruption has led to the closure of a key refinery in California, while the size of the oil-on-water storage fleet in Asia reached new highs
Paris-based tanker tracking and oil logistics data service Kpler estimates global oil storage has reached 120M bbls, surpassing the highs of 2016. In parts of the USA, land-based storage associated with local refineries is full and tankers are being forced to bask in the Southern California sunshine.
The tankers were booked with crude oil cargoes for California refineries weeks ago and have arrived to find Covid-19 coronavirus lockdown in the state has crushed demand. Marathon Petroleum Corp’s refinery in Martinez, California, has been idled and others, including Chevron Corp’s El Segundo refinery, are running at reduced utilisation levels. As a result, the US Coast Guard (USCG) reports that as at 23 April 2020, there were 27 tankers off the coast of Southern California.
The arrival of the tankers presents the US Coast Guard with a unique challenge.
The location of the tankers is determined by the Vessel Traffic Service Los Angeles-Long Beach, which provides anchorage assignments based on physical requirements, such as a vessel’s draft, length, type, as well as logistical requirements such as duration of stay and intentions while at anchor.
"Due to the unique nature of this situation, the Coast Guard is constantly evaluating and adapting our procedures to ensure the safety of the vessels at anchor and the protection of the surrounding environment," said USCG Sector Los Angeles/Long Beach Cmdr Marshall Newberry, "Coast Guard watchstanders, in partnership with the Marine Exchange of Southern California, are closely monitoring each anchorage to manage the increased number of tanker vessels we’re seeing off the California coast."
Vessel Traffic Service Los Angeles-Long Beach is jointly operated by the USCG and Marine Exchange of Los Angeles/Long Beach from the Vessel Traffic Center located in San Pedro.
Kpler estimates there is now a record 20M bbls of crude oil and oil products waiting and watching delivery windows from the Californian coast. The service also reports that Asia’s floating crude storage rose by 18M bbls week-on-week to 56M bbls on 17 April 2020, the highest in at least four years. Within the region, the hubs of floating storage are currently concentrated around Malaysia, Indonesia, India and China.
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