Surprise rise in floating storage boosts tanker market

There has been a surprise in floating storage despite the rising oil price, which is helping bolster the tanker market according to Poten & Partners.

In its weekly market report Poten noted that more vessels were being used for storage over the last four – six weeks. “Surprisingly enough though, it appears that the utilisation of VLCCs for floating storage has increased in recent weeks,” it commented.

While some vessels reported as being used for storage off Iraqi were in fact queuing to load there has been a rise in the number of vessels used for storage in other markets.

“Vessel tracking information reveals that about a third of the vessels taken on time charter earlier in the year are now used for floating storage.” Most of these are in the Arabian Gulf, but there also some in Singapore, West Africa and the Mediterranean.

“It is difficult to speculate why certain charterers engage in floating storage at this point, but it is clear that it does provide additional support for the large tanker market,” the report concluded.

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