As bulk storage for petroleum products nears maximum capacity in Europe, traders are now booking tankers for use as floating storage of diesel on the continent and in New York, reports say.
There is currently around a $5 price differential between the November deliveries of low-sulphur gas oil and futures contracts for delivery in 12 months’ time, making floating storage economically viable for traders.
Meanwhile, diesel supplies to Europe are rising rapidly and are expected to keep increasing into the winter. Gasoil inventories in the Antwerp-Rotterdam-Amsterdam (ARA) port range have risen to a record-high of 3.754m tonnes over the past week, according to data from PJK International.
In September, more than 5m tonnes of diesel were imported into Europe, creating an oversupply of more than 500,000 tonnes, traders told Reuters.
Reuters reports that Vitol has booked two “90,000-tonne tankers” to store diesel off the coast of Britain for an “extended period of time”. (Splash would guess that 90,000 tonnes may refer to the parcel size of the cargo, which would be carried in an aframax or LR2 tanker of around 110,000 dwt, seeing as 90,000-dwt aframaxes are now largely a thing of the past).
Royal Dutch Shell has also booked a “90,000-tonne tanker” (presumably an aframax) to store product outside the New York Harbour, traders and shipbrokers told Reuters
Brokers report today that Vitol has extended its timecharter of Jebsen Skipsrederi’s oil-bulk-ore carrier SKS Tana (109,900 dwt, built 1996) for nine months at an unreported rate. AIS data says the vessel is on its way to Scheveningen, Netherlands, from Gibraltar, which makes it possible that this is one of the vessels chartered for floating storage, especially considering the vessel’s age.
Shell has this week fixed two aframax tankers that could possibly fit the profile of the vessel to be used as floating storage.
Liquimar Tankers’ LR2 Iasonas (115,500 dwt, built 2009 was fixed to Shell on a two-year timecharter for $24,500 daily, according to brokers’ reports.
Shell fixed another Liquimar Tankers LR2 vessel this week, Amfitriti (115,500 dwt, built 2009), for three years at $14,500 daily. The vessel is currently in the Baltic Sea, ballasting to Ust Luga, Russia, AIS data shows.
Recent weeks also have seen a number of tankers chartered to store jet fuel at sea.