Fleet Of 28 Saudi Oil Tankers Could Send U.S. Oil Prices Crashing In May

With the Covid-19 pandemic reducing global oil demand by devastating numbers, oil storages are filling quickly in the US, forcing producers to start shutting output in the country and creating a big tanker congestion on its coasts. A Rystad Energy analysis reveals that 28 tankers with Saudi oil, including 14 VLCCs and carrying a total of 43 million barrels, will arrive on the US Gulf and West coasts between 24 April and 24 May. The Saudi fleet, with oil loaded at Ras Tanura, will join an existing congestion of 76 tankers that are currently waiting to unload in US ports. Most of these tankers are on the West Coast, where 34 tankers are waiting in line to offload about 25 million barrels of crude. In addition, about 31 tankers, carrying a similar load, are waiting for a slot to unload on the US Gulf Coast. The tanker congestion has spiked in recent days because refiners are canceling or deferring their purchases, as they adjust utilization rates to match the steep fall in demand for road and jet fuels. “The total volumes booked to arrive from Ras Tanura are four times higher than the previous four-week average of imports from Saudi Arabia. Given the current storage situation and the level of congestion on US coasts, we find it unlikely that all tankers will be able to unload upon arrival. The congestion at US ports has reached new highs,” says Paola Rodriguez-Masiu, Rystad Energy’s Senior Oil Markets analyst...MORE