Low oil prices have been a boom in the tanker industry. The shipping industry has witnessed a sea change where the dry bulk shipowners have queued up their vessels at the scrapyards. The container shipping is busy with ultra large ships creating records and SOLAS container weighing requirements about to fall in place this year. The tanker market is on a high-fly where the bunker fuel prices are record low and the crude oil is enough such that soon the swimming pools and tanks will brim with crude.
The refiners and speculators are looking forward storing crude at sea as storing at the shore have the limitation in terms of space availability and regional costs involved.
So How Much Does It Cost to Store Crude At Sea?
Costs to hire a ship and fill a ship with oil vary by region. On top of the daily charter costs for an oil tanker of about $55,000 (U.S.), traders that use floating storage must pay for the ship’s fuel (3 cents a month per barrel), port support costs (10 cents a month per barrel) and interest on the loan to finance the purchase of the oil (10 cents a month per barrel). This can add up to about $1.10 a month per barrel. Floating storage becomes profitable only if the difference between current and futures prices of oil exceeds these costs. Thus given the current economic scenario, it is more profitable to store the crude at sea than to stock it in the shore tanks.
Source: The Globe and Mail
