As World Panics Over Oil Storage, Orbital Data Shows 2B Barrels of Space Left
As global oil producers race to slash production over the coronavirus pandemic, questions are being raised on whether the cuts will be enough and how many more days of supply storage there are in the tanks if oversupply continues.
Orbital Insight has a partial answer to that: Our real-time tracking technology for crude oil storage shows tanks can still accommodate more than 2 billion barrels worldwide.
According to Reuters oil analyst John Kemp, no other comprehensive data exists on total global storage volumes in the petroleum supply chain.
The proportion of unused storage available to cope with the drop in consumption due to the COVID-19 is also unknown, although it is believed to be filling quickly, Kemp says.
The only widely-circulated data in the market are estimates on how much global consumption of crude may have fallen due to the pandemic.
The Paris-based International Energy Agency, the watchdog for Western oil-consuming nations. estimates demand loss at 20 million barrels per day as all non-essential travel and economic activity grind to a halt amid efforts by authorities worldwide to stem the outbreak.
Oslo, Norway-based Rystad Energy, meanwhile, calculates that as much as 27 million bpd of demand may have been lost for April itself.
Rystad also estimates that U.S. storage capacity alone could have fallen to as little as 200 million barrels in April from demand lost to the COVID-19. In practice, available crude capacity might be closer to 150 million barrels, it says.
It’s times like these when credible, insightful and timely data on the supply chains in oil, and flows to storage tanks, become even more crucial to energy executives, shippers, refiners, traders, analysts and journalists.
Orbital Insight tracks almost all of the world’s 27,000 floating roof tanks and automatically estimates total crude volumes on a daily basis using high-revisit optical satellite imagery and focused Synthetic Aperture Radar (SAR) signals beamed up from key terminals.
Here’s what our view of the global scale and capacity utilization for net exporters of oil looks like across 6 billion barrels of storage:
- Global — 3,197.33 crude volume estimate (mmb) — 55.5% fill
- US — 317.59 crude volume estimate (mmb) — 50.7% fill
- Saudi Arabia — 106.30 crude volume estimate (mmb) — 59.1% fill
- Iraq — 17.21 crude volume estimate (mmb) — 46.1% fill
Orbital Insight’s satellite-driven tracking of oil inventories spots new tanks that are constructed every month. We add these to our catalog, making Orbital Insight’s database the most comprehensive storage catalog in the world.
This database is a capture of total global storage capacity and actual inventory, by country and region, and is updated daily. Using it, our clients can see how accurate the situation on the ground is for oil versus media headlines that we might be running out of space soon to store oil.
With Orbital Insight monitoring global oil tanks on a daily basis, we’re working on the assumption to say that there’s approximately 2 billion barrels of storage left. Tanks can’t reach 100% of their capacity anyway because there needs to be room to facilitate transportation.
So, back to our reading on the 2 billion barrels of space left in global oil tanks. How quickly that it is used up will depend on the daily fill rate of crude.
While agencies like Rystad estimate that there may be just about two months of storage left at the current filling rate, we monitor these tanks every day and can objectively say that the fill rate is far slower.
The fill rate of storage tanks will also depend on how well producers comply with a global crude production deal agreed on April 13.
Under the deal, the Saudi-led Organization of the Petroleum Organization Countries, which counts on Russia as a key ally, will cut 9.7 million barrels per day under the OPEC+ initiative.
The United States, Brazil and Canada — countries that never before had any collaboration with OPEC in its 60 years — will contribute another 3.7 million barrels on paper as their production declines.
Big crude stockpiles are a problem for oil producers. They reflect weak demand and result in even weaker crude prices. Before the global oil agreement, ill-timed production hikes by Saudi Arabia combined with demand lost to the COVID-19 dragged crude prices down 60% on the year, pushing U.S. crude futures to $19 levels and Brent, the global benchmark, to the low $20s.
While this post captures a critical snapshot reflecting the current situation in global crude storage, Orbital Insight’s Floating Roof Tank product gives users a daily view into inventories and spare tank levels. To see how the situation continues to unfold we invite you to see the product for yourself and keep tabs on the daily change in storage utilization.