The Oil Floating Storage Trade Is On After Crude’s Latest Tumble
- Brent has plunged through $25 a barrel as virus hits demand
- Saudi Arabia flooding the world with as much oil as possible
This article is for subscribers only.
The latest collapse in oil prices has put in play a lucrative trade to store crude at sea, reviving memories of the 2008-09 recession when millions of barrels were kept on the world’s oceans.
Brent crude in May 2021 is now trading at about $14 a barrel more than it is in May of this year. That constitutes a premium of $28 million over a year for a standard supertanker cargo holding 2 million barrels. A trader can profit from floating storage by selling cargoes in the future, provided the premium they’ll fetch for it would exceed the cost of hiring a tanker. Several of the world’s largest trading houses said the trade is now profitable.