Tuesday, September 9, 2014

Chinese Buying Super-Tankers -- Including The World's Largest Super-Tanker -- To Store "Cheap" Oil -- September 9, 2014


December 26, 2018:
December 13, 2014: FuelFix update It's the first link at that site.

November 22, 2014: update in BloombergBusinessweek
Original Post

Reuters is reporting:
A Chinese trading firm has booked the world's largest super-tanker to store crude at sea, adding to a growing flotilla of vessels used for floating storage as benchmark oil prices slip below $100 a barrel.
Industry sources said Chinese firm Unipec, the marketing arm of Beijing-backed oil giant Sinopec, has booked the 3.2-million-barrel TI Europe, one of just a handful of Ultra Large Crude Carriers (ULCC) still in service. It is listed as the world's largest ocean-going vessel by tonnage, and is as long as the Empire State building is tall at 380 metres.
The booking is the latest sign that soaring oil supplies and tumbling prices are prompting traders to store crude in volumes not seen since the financial crisis more than five years ago. Analysts estimate more than 50 million barrels of oil may already be placed in storage.
The move also demonstrates the growing clout of state-backed Chinese firms in international oil trading, with Unipec and PetroChina establishing sophisticated dealing desks in key hubs like London and Singapore in recent years. Unipec plans to ship cheap oil from Europe and store it off Singapore aboard the ULCC, trading sources said.
Previously reported, elsewhere: Russia increasing energy ties with China.

In the linked story above: "[China] plans to ship cheap oil from Europe and store it off Singapore aboard [these super-tankers].  "Cheap oil from Europe." I haven't heard that phrase in a long, long time. This has to have Saudi Arabia very, very worried. Just three days ago, September 5, 2014, I wrote: 
Saudi Arabia is in trouble:

  • US domestic oil pricing competitive with Saudi oil (fact)
  • Saudi running out of oil (controversial; not all agree)
  • Saudi resides in a bad, bad neighborhood (fact); building the "Great Wall of Saudi"
  • Saudi depends on US companies for technology (fact)
  • Saudi doesn't have much else going for it, other than oil (and camels) 
  • Saudi uses 25% (or more) of its own production for its own internal consumption
  • Saudi needs $100 oil to maintain lifestyle for the rich (and hijabbed)
I guess we can add "cheap oil from Europe" as a threat to Saudi's oil. This is getting very, very interesting. At one time there were "conspiracy theories" that Saudi was funding anti-fracking activities in the US. Looking at the list above, .....

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