Oil companies are storing crude on at least seven supertankers off the coast of the UK, as growing prices reduce the incentive to put more oil into storage.
Seven Very Large Crude Carriers (VLCCs) containing as much as 14 million barrels of North Sea crude, enough to supply the country for more than a week, are anchored off the coast of the British isles.
Oils 30% price increase over the past month has prompted speculation that traders who have been storing crude at sea would start selling the oil for a profit, with Total selling at least 1.8 million barrels of Forties oil it had been storing off the UK last month.
While the amount of crude stored on tankers may be declining, 'it is still a weak market' and a drop in prompt prices 'could trigger additional floating storage,' said Alexander Poegl, an analyst at JBC Energy in Vienna. The consultant estimates that as many as 90 million barrels of oil may still be stored on tankers worldwide.