Global Oil Storage Capacities Facing Shortages?

Uncertainties plaguing the oil and gas markets are deeply intertwined with global storage capacities which are believed to be facing shortages.

“There are conflicting reports about whether there is a shortage of storage for oil,” Edwin Lammers, Executive Commercial Manager at SOHAR Port and Freezone said in a speech at the Tank World Expo in Dubai.

“In the U.S., for example, total commercial stocks of crude oil are said to be close to 500 million barrels, which is nearly 150 million more than the average over the last 5 years.

However, other analysts say storage facilities are sufficient,” he added.

According to Lammers, oil prices continue to slump and storage capacities fill, therefore being able to get liquid bulk on and off ships quickly is something that will be increasingly important.

He stressed said that developing an efficient operations model has proven pivotal in attracting and retaining tank storage business at Sohar.

“In other regions, there may be genuine shortages, for example, in China. But whichever way you look at it at a certain point these huge volumes will need to be transported from storage facilities, and that is where having efficient operations and transportation comes into play in terms of turnaround times and costs.”

“As oil margins continue to be squeezed by issues beyond the control of port authorities, one thing we can control is the speed liquids are transported from ship to shore, and the efficiency with which vessel calls are conducted. As we do so, we continue to receive very positive feedback from our growing customer base,” he added.

With projects in the region valued at over USD 100 million, Mr Lammers said chemicals are also expected to be big business for SOHAR with PE, PP, PET, and PTA production all set to come online.