Oil firms to store crude on ships as oil tanks

DUBAI (Reuters) – Oil companies plan to store millions of barrels of crude at sea as they wait for demand to pick up and prices to rise.

So far oil companies have booked ships capable of holding up to 10 million barrels, brokers have said, more than the daily output of top exporter Saudi Arabia.

On Thursday U.S. oil trader Koch and Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) were the latest to confirm bookings of additional Very Large Crude Carriers (VLCC), brokers said.

The companies were not immediately available for comment.

Brokers said the cost of hiring vessels at current depressed rates would be less than the gains from waiting for an upturn in crude prices and in refiners’ profit margins.

Reuters