Altered supply chain dynamics, which has seen the US move from peak oil to a supply glut, have created attractive conditions for storage operators
The resurgence in US crude production over the past several years has generated a myriad of market and structural
changes, including upending world trade flows while pressing and holding refined fuel prices at low levels that has incentivised demand.
Of the many industry responses from upstream to downstream amid this paradigm shift, one has been a buildout in new storage tankage – a trend that continues.
CHANGING SUPPLY CHAIN LOGISTICS
Over a 10 year period, the country went from peak oil to a supply glut, and in many ways flipped supply chain logistics from demand pull to supply push. As drilling activity surged and US crude production reached rates last seen in the early 1970s, new pipelines were built and others expanded, refineries added capacity, new storage tanks were erected, and growth in exports exploded.
The US consumer has welcomed the new environment, driving more than ever, while the economic benefit has steadily boosted industrial and commercial output, albeit at a sluggish pace. Moreover, the advantages for US businesses do not stop at the border, with climbing fuel exports to Mexico also prompting spending on infrastructure to support operations.