Oil Glut Closes Middle East’s Largest Crude Terminal
EghtesadOnline: With the coronavirus choking fuel demand and the world awash in surplus crude, even the Middle East’s main oil-trading hub has run out of room to store unwanted barrels.
Terminal operators at Fujairah in the United Arab Emirates say they are turning down requests from traders and refiners to store crude and refined products, whereas a year ago they had ample space, Bloomberg reported.
The port’s 14 million barrels of commercial crude-storage capacity is just a fraction of what Saudi Arabia and Abu Dhabi provide for their state oil companies, Financial Tribune reported.
Without tanks to lease, traders face costly constraints on their role as matchmakers who link a specific supply here with a willing buyer there.
The global oil glut is making it harder for traders to even out imbalances in the market, and the plunge in crude, down about half this year, is making matters worse.
“If tanks are leased or blocked, then traders need to push back on taking crude,” said Edward Bell, senior director for market economics at Emirates NBD PJSC in Dubai. That, in turn, could “force production shut-ins.”
Demand for storage, an unglamorous but essential link in the global energy supply chain, is at its highest in years.
From Singapore to Cushing, Oklahoma, tanks are brimming with crude, gasoline and other products, nowhere more so than in Fujairah, a gateway for shipments from the world’s most prolific oil-producing region.