According to the latest info, global storages filled with oil. And it is unlikely that OPEC is going to win the battle with a glut in the nearest future. At the meantime, all unsold product is staying in the old tankers.
Apparently, traders prefer to turn old tankers into the storages and keep their oil there, near the shores of South Asia.
While OPEC is desperately trying to stop the glut and empty the space in storages for new oil, workers of commodity markets have found the solution. They are saving oil in the new storages, which are swinging in the sea.
According to the latest information, there are more than dozen old carriers with age close to the 20 years old, which are drifting at sea filled with oil since the last month. They were allowed to keep the cargo up to the half of the year. Each of them can take 2 million barrels of the product.
Why did traders decide to keep oil in vessels? Apparently, it is cheaper and faster to deliver it to the new customers if they will find them.
Since May prices on the Brent global benchmark have already lost 13 percent, and there is no guarantee that desperate move of Saudi Arabia to deeply cut their own oil output or OPEC’s decision to prolong the cut is going to increase prices. Right now they are lower than 47 dollars per barrel, which is the worst nightmare of OPEC with their lowest threshold in 50 bucks. And the delivery of this oil went 1.5 dollars a barrel less cheap.