The Coronavirus and the lockdown also significantly decreased fuel use worldwide. At the same time, the need for oil storage has brought tanker freight to record highs. Industry data is showing these Storage facilities are plentiful along the beaches.
Around the same time, the supply chains produce a significant amount of oil. Oil-producing countries, businesses, and refineries are filling more ships in the hope that the situation of heavy demand will be dealt with in the future. Explain that the global demand for oil decreased by 30% in this quarter, as the lockdowns stopped the ground economy.
If this condition persists, the US capacities for oil reserve will be completely loaded in Oklahoma and Southern California by May 2020. This situation has forced producers and traders to rent oil tankers for floating storage units, at least for now.
This has culminated in a significant rise in the daily fare of very broad crude oil-carriers or VLCCs. Now, the average fare for a day is running at the US $ 240,000. This freight was already the US $25,000 two months earlier.
The growth has greatly increased the stocks of oil tankers. According to industry experts, the logistics firms affiliated with oil tankers are going through a period of tremendous benefit.
Apart from the use of tankers for storage purposes, the existing consignments are also being connected to major ports around the world. These tankers have no other option to remain there until they are evacuated.
Sea traffic may be categorized into two groups-first shipping orders before the Covid-19 pandemic began, and stockpiles affiliated with oil suppliers and dealers being processed after the pandemic. Oil consignments are either docked at shipping ports or en route to reach their floors.