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27 February 2024

Canny buyers stockpile oil off Fujairah

Buyers are stockpiling cheap crude in the waters off Fujairah. (REUTERS)

By Staff
Canny buyers are stockpiling billions of barrels of cheap excess Gulf oil at sea off the coast of Fujairah, according to media reports.

US oil firm Koch Supply and Trading has reportedly booked a supertanker for six months to store about 2 billion barrels of crude.

The waters off Fujairah have long been used as a fuel bunkering hub, however the trend towards offshore storage has gained momentum because onshore oil depots are full and traders expect prices to rise in the near future.

The move towards offshore stockpiling also indicates how sharply global demand for crude has fallen. US oil stocks, flooded with Canadian oil, hit their highest levels in 18 months last week, rising by 7.2 million barrels to a record 34.3 million barrels.

According to the reports, the tanker Artemis Glory will be moored off the southern tip of the Arabian peninsula, ready to receive excess Gulf oil. The oil is tipped to come from Oman, a small non-Opec producer, or Iraq, which is exempt from Opec quotas as it rebuilds.

The UAE is to cut its contracted March crude deliveries in line with lower Opec production targets announced in December, with the cartel pledging to slash output by a record 2.2 million barrels per day.