The total volume of oil being transported on the world’s oceans has reached its highest level in more than two years, a significant indicator of swelling global supply that is expected to lead to an oversupplied market and downward pressure on crude prices.
Record Volume of Oil at Sea
Multiple analytics firms confirm that the amount of crude oil on tankers has surged, reflecting a major buildup in seaborne supply.
- Vortexa data indicates that approximately 1.25 billion barrels of oil are currently at sea, the highest figure since April 2023.
- Kpler and OilX also track the measure at its highest since June 2023 and May 2024, respectively.
- The increase suggests that global inventories are likely to rise in the coming months, with the International Energy Agency (IEA) expecting a record oversupply next year.
Drivers of the Surge in Shipments
The record high volume is attributed to rising exports from both OPEC and non-OPEC countries, particularly driven by a September surge from the world’s largest exporters.
- Top Exporters’ Role: Global seaborne oil shipments soared by more than 2 million barrels a day in September compared to the previous month, as the world’s three biggest exporters—the US, Saudi Arabia, and Russia—all poured more barrels onto the global market.
- Middle East Exports: A “big increase” in Middle East crude exports in September was the largest contributing factor, driven by the cumulative impact of OPEC+ production increases and a likely significant decline in direct crude oil burn. It also reflects sizable refinery crude processing capacity scheduled for maintenance in the Middle East in October.
- Longer Journeys: Higher volumes of oil sailing from the US and West Africa to Asia are supporting longer tanker journeys, which naturally increase the total amount of oil at sea at any given time.
- Historic Export Level: A Kpler analyst noted that global crude exports are at their highest in over five years.
Market Implications
The swelling supply is creating contradictory financial outcomes for different sectors of the oil market.
- Crude Prices: The increase is likely to weigh on crude prices, a trend already signaled by the recent softening of futures markets.
- Tanker Earnings: The surge in volume is proving lucrative for ship owners, with earnings for giant supertankers recently approaching $100,000 a day.
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Source: gCaptain
