The Global Oil Glut! Arises a Surprise Winner!


  • The world witnesses historic OPEC+ production cut deal. 
  • No oil demand across the world amid lockdowns and travel restrictions. 
  • Oil storage capacity around the world has become thin. 
  • At present, there is an unprecedented global oil glut. 
  • Despite, some oil-producing countries and their national oil companies (NOCs) are set to fare better than others. 

Tsvetana Paraskova writes in Oil Price about the oil war that has transpired into winners and losers in terms of making appropriate profits and getting benefitted even in this dire situation, where oil is unsold, unproduced and unheard of in the world, except for its crumbling price which has hit the nadir. 

In brief, Tsvetana Paraskova shares her view points based on the article written by Michael Lynch in Forbes. 

Extreme market situation

The oil industry scrambles to stash crude oil and refinery products that no one really needs right now.  In this kind of extreme market situation, there always emerges a big winners and big losers.


 Oil-producing nations with higher shares of spot sales would likely feel the pinch from the storage capacity crunch much harder than others.  It is because amid the huge oversupply refiners are even trying to get out of some clauses in long-term contracts, let alone snap up spot cargoes.

Refined product distributors will lose the most—people are not driving and are under lockdown in many countries in the world, including in India and the largest oil consumer, the United States.


The owners of storage capacity—onshore and offshore are the biggest winners in the current market situation.  Storage is the most sought-after ‘commodity’ in the energy market. Especially, in the past month the demand was crashing, while the supply was rising.

Offshore, traders are scrambling to book floating storage, and charter rates for supertankers are skyrocketing. Storage costs are surging, and so are costs for chartering tankers to store oil at sea for future sales when traders expect demand to recover from the pandemic-hit plunge.

Amid the glut which OPEC+ cuts will not be able to stave off next month, owners of storage capacity will be the biggest winners in these most unusual times for the oil industry. 

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Source: Oilprice


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