Oslo-based analyst Rystad Energy warned on Friday that global storage capacity for crude oil and products could run out within months. The firm estimates that there are already about 7.2 billion barrels in storage, including 1.3 to 1.4 billion barrels on tankers at sea. This total represents about 76% of world capacity.
The analyst warned that "the largest oil supply surplus the world has ever seen in a single quarter is about to hit the global market from April, creating an imbalance of around 10 million barrels per day. The current average filling rates indicated by our balances are unsustainable.”
As a result, the firm said that global storage infrastructure is in trouble and will be unable to take more crude and products in just a few months. "There is essentially no idle storage capacity available on tankers as Saudi Arabia and other producers might have already wiped out the available population of VLCCs for March and April," Rystad declared. "At the current storage filling rate, [oil] prices are destined to follow the same fate as they did in 1998, when Brent fell to an all-time low of less than USD 10 per barrel."