Oil tankers carrying enough crude to satisfy 20 per cent of the world’s daily consumption are gathered off California’s coast with nowhere to go as fuel demand collapses.

Almost three dozen ships scattered in waters from Long Beach to the San Francisco Bay — are mostly acting as floating storage for oil that’s going unused as the coronavirus pandemic shutters businesses and takes drivers off the road.

Marathon Petroleum’s refinery in Martinez, California, has been idled and others, including Chevron’s El Segundo refinery, have curtailed crude processing as the state orders residents to stay at home.

The more than 20 million barrels of crude is the highest volume of crude to ever float off the West Coast at one time, according to Paris-based Kpler SAS, which tracks tanker traffic.

About three quarters of those tankers are holding oil in storage, meaning they have been floating steadily for seven days, also a record.Advertisement

Storage has become increasingly scarce as a growing supply glut collides with collapsing fuel demand. As traditional tanks have filled, oil has been pushed onto tankers to float off Singapore, the US Gulf Coast and, now, the US West Coast.

The Seaexpress, a tanker that normally carries fuel, is currently holding crude for Royal Dutch Shell. for at least a month in Puget Sound, Washington, after data on the ships draft indicated it loaded up at the company’s Anacortes refinery.

Extracted from AFR