Not again
Oil is trading in the mid-80′s again, while the outlook for the US economy remains weak. Meanwhile, Iran is hoarding supertankers like it was 2008 again. Bloomberg:
Iran, OPEC’s second-biggest crude producer, expanded the number of supertankers being used to store surplus oil, echoing a program that contributed to a tripling of freight rates two years ago.
At least nine such vessels are idling in the Persian Gulf, Gulf of Oman and to the south of Egypt’s Suez Canal, according to data from the ships collected by AIS Live Ltd. Two months ago, there were three. Their depth in the water indicates they are loaded, with as many as 18 million barrels of oil being stored, almost enough to supply Europe for a day.
Refineries across Asia, accounting for almost two-thirds of global demand for supertankers, typically process less fuel in the second quarter to carry out maintenance. Two years ago, Iran used as many as 15 tankers for storage when demand from refiners fell, constricting vessel supply and helping to drive up freight rates more than 200 percent in less than three months.
Less than two years ago the price of oil spiked to $147 a barrel, largely to to out of control speculation. What are the chances this will happen again — or are the recent rise in crude prices and Iran’s supertanker gambit an indication of something else entirely?
April 14th, 2010 at 12:52 am
OK. Let’s play what-if. They have virtually no refining capacity. So it’s not to store up to make gasoline or kerosene to soften the blow of against potential sanctions. Doing the math, at an increase of $60 to $80 a barrel, 18 plus million barrels brings in cold cash and could fund lots of other “projects” they may have. Sounds like a speculative move then.
On the other hand, several fully loaded tankers strategically placed and then scuttled with their cocks opened to the sea could cause quite a mess and slow down (or even stop) shipping or military traffic for some time. This is a very interesting move on their part.