World oil gluts persists as Asian slowdown looms


As oil production reached record highs along with soaring consumption, especially in Asia, ports around the world have struggled to keep up with the flood of seaborne oil traffic.

There is so much oil stored or going around the world in tankers that drastic and violent supply disruptions, such as Canada’s wildfires, sabotage in Nigeria, civil war in Libya and crisis in Venezuela, as well as a wave of bankruptcies in the United States have not managed to end the glut, and oil prices remain relatively low.

In the Middle East, soaring output even in conflict-torn Iraq has left its main oil port at Basra struggling with volumes, resulting in waiting times of around a month for tankers to load crude.

In China, the rise of independent so-called teapot refiners has lead to a jump in crude imports with which its ports like Qingdao are also struggling to cope. Here, too, tankers have had to wait for weeks before unloading.

And in between the Middle East’s producers and North Asia’s main consumers of China, Japan and South Korea, Asia’s oil trading hub of Singapore is also juggling hundreds of tankers that pass for maintenance, refuelling, to supply refineries, or are simply parked as floating storage facilities.

Now, a looming economic slowdown in Asia threatens to dent the strongest pillar of recent strong demand.

See below for a collection of graphics on this unprecedented tanker congestion.

asia-oil-demandChina product exports
Source: Reuters

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