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A group of American oil ships heads to a small terminal in Cork as buyers search for places to store crude oil in the wake of a slowdown in global demand.
Since April, four ships carrying a total of 2.4 million barrels of U.S. oil have set sail for the Bantry Bay terminal operated by Zenith Energy Management, according to ship tracking data compiled by Bloomberg. Two of those tankers, which were carrying oil off the coast of the US Gulf. In the USA, they were originally established for the Netherlands and the United Kingdom, but were redirected to Bantry Bay. The United States’ oil deliveries last month were the first for the facility.
It is “a natural extension of US crude oil in the flow of international trade and is driven by market fundamentals,” said Zenith chief commercial officer Jay Reynolds.
Storage has become increasingly scarce both onshore and offshore as the Covid-19 outbreak has devastated global demand for oil. The International Energy Agency said this week that it will take more than a year for oil demand to recover to levels before the virus closes economies.
Two million barrels
Zenith’s Banith Bay terminal can store nearly two million barrels of crude, and the rest of its nearly nine million barrel site contains refined products. It was built in 1968 for the purpose of importing large loads of foreign crude.
“The last time we saw a crude import was in November 2019, but it was regional UK crude,” said Syed Ahmad, an oil analyst at shipping data provider Vortexa.
US crude oil exports to Ireland peaked at 2.4 million barrels in January, according to data from the Energy Information Administration. Bantry Bay storage is fully contracted and utilization has exceeded 95 percent.
Until demand recovers, “those seeking relief from crude deliveries will be diverting their supplies to lesser-known options like Bantry Bay,” Ahmad said.
– Bloomberg
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