The crashed global oil demand on the impact of the coronavirus pandemic has driven European refiners to keep their oil cargo afloat and unloaded as the storage tanks have started to fill up.
As of Thursday, Refinitiv Eikon shipping data showed that more than 25 tankers, roughly carrying a total of 18 million barrels, were anchored near European ports. Most of those cargoes had been there for more than a week.
Traders said that many of the cargoes were purchased before the pandemic paralyzed business and social activities in Europe and set to arrive in late March or early April. However, at the moment, the volumes are not needed.
A source from a major oil firm said that a refiner told them that the company could not take cargo now and there is no clarity on when they would be able to.
In Europe, storage facilities are filling up quickly with almost all tanks already rented, leaving the refiners no other choice than to float the cargo until it can be offloaded.
The Mediterranean region is being hit the hardest compared to other European regions as refining run rates have been cut sharper.
According to some traders and shipping data, Italy’s Trieste port has six vessels waiting to offload. Other Italian ports, such as Milazzo, Vado Ligure, and Genoa, along with France’s Fos, Turkey, and Greece, have also faced similar situations.
Meanwhile, in northwest Europe, the situation is generally better although there were still vessels delayed by several weeks in the Antwerp-Rotterdam-Amsterdam hub. Traders are concerned that the figure would grow.
A trader opined that the OPEC+ newest record-high oil output cut might not be able to break the current supply glut in Europe’s physical market.
