Millions Of Barrels Of Oil Nobody Wants Are Floating In The Ocean
The price of oil is plummeting and millions of barrels of oil are being produced that nobody wants — and they’re going right to the ocean.
Oil demand is in a freefall, thanks to improvements in battery technology, the proliferation of green energy alternatives, and — let’s face it — a world on lockdown due to the deadly COVID-19 pandemic. All of these factors have come together to push barrels of oil to their lowest price in decades, but production hasn’t stopped, which means there are now millions and millions of barrels of crude just sort of stuck. Adrift at sea, “stored” on massive oil tankers and waiting for things to go back to normal.
Except that, for energy companies, it’s getting harder and harder to imagine that we’ll ever get back to what they think of as “normal” with each passing day of telecommuting and each new press release from companies like Tesla, Lucid, and Volvo Polestar launching new EVs and gloating about success after success. It sort of begs the question: is oil over?
“There’s oil all over the oceans right now. That’s where they are storing oil. We have never seen anything like that,” US President and alleged sex-offender Donald Trump said this week, seemingly flustered, from the podium of the White House. “Every ship is now loaded to the gills (with oil).”
Despite the fact that oil companies are losing money, gas stations are facing bankruptcy, and lost tax revenue from fuel sales is choking cash-strapped government budgets, not everyone is losing money. In fact, it’s probably a great time to be in the fuel storage business, because that business is booming! “The world is overproducing oil at a historic rate,” explains Robert Hvide MacLeod, the head of Frontline Management, one of the world’s largest operators of oil tankers. “Land-based storage is limited and selling out fast. Storage on ships will be the only solution.”
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