By Serene Cheong (Bloomberg) — One of the biggest stores of oil at sea is showing signs of emptying out.
The volume of supplies held on tankers in the Strait of Malacca in September dropped to the lowest level since August 2016, according to data from cargo-tracking and intelligence company Kpler. The waters off Singapore, Malaysia and Indonesia — one of the world’s busiest shipping channels and a major hub for what’s known as floating storage — held 8.1 million barrels late last month on a 10-day moving average basis, compared with about 30 million in May.
Some traders are giving up on ships they chartered for storing oil as potential profits from future sales no longer justify the cost of hiring the vessels. That’s after the market’s structure has flipped to backwardation, where crude for later delivery is cheaper than near-term shipments, as demand improves and OPEC-led output curbs contribute to a supply squeeze. Not all are abandoning the strategy, though, with some traders still finding ways to benefit by offering tailor-made cargoes put together at sea.
Kpler defines floating storage as the volume of oil on tankers that are idled offshore for 15 or more days. The Strait of Malacca consists of anchorage areas including Pelepas, Linggi, Batu Pahat and Tanjung Bruas.
© 2017 Bloomberg L.P
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 108,828 members that receive our newsletter.
Have a news tip? Let us know.
When President Donald Trump sat down to lunch with his Japanese counterpart this month, talk turned quickly to how Tokyo could help realise a decades-old proposal to unlock gas in Alaska and ship it to U.S. allies in Asia.
Swedish and Finnish police are investigating a suspected case of sabotage of an undersea telecoms cable in the Baltic Sea, and Sweden's coast guard has deployed a vessel to the area where multiple seabed cables have been damaged in recent months.
Global marine fuel sales jumped in 2024 after attacks by Yemen's Houthis starting in late 2023 prompted most shipping companies to divert vessels around southern Africa rather than through the Red Sea, according to data and analysts.
Maritime and offshore news trusted by our 108,828 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
