It’s no surprise that oil storage ranks as the top commodity, most oil producers are desperately in search of Oil storage concerns the storage of crude oil in storage facilities such as tanks or tankers built to contain over 10 million gallons of crude oil at a time depending on its size.
The COVID 19 pandemic that has led to the imposition of certain restrictions and has seen certain countries being ushered into economic recession. Consequently, there has also been a decrease in the demand for oil supply and this has resulted in the need for countries to embrace oil storage options but countries are beginning to run out of storage spaces to contain the large crude oil inventory build that skyrockets every week. This has led to a global oil storage crisis.
In need of viable options, the U.S government as well as other oil producing countries are reaching out to capable private oil companies like GIS MIDSTREAM, since oil production in the States cannot be hindered because of limited storage space in the oil reservoir.
Oil storage providers like GIS MIDSTREAM (fully equipped with a storage capacity of about 57.1 million m3, possessing storage terminals in Houston, Rotterdam, Qingdao, a tank storage system that offers high pumping rate for effective loading and unloading, well equipped with flexible pipeline routing system and covers an area of about 1,000,000 sqm) are required to provide their storage options in order to help ease off the oil storage crisis.
The reduction in the usual demand of oil (a factor that has contributed to the need for reliable storage providers like GIS MIDSTREAM) could be attributed to the fact that movement in and out of certain countries have been restricted. The reduction has left the petroleum industry with little options but oil storage tops them all. This makes oil storage currently the hottest commodity in the petroleum industry.
The U.S was once fully equipped with storage infrastructures for unused oil and had no storage capacity issues until now. Jim Burkhard, the head of crude oil research, energy and mobility research at IHS Markit confirms the fact that storage facilities are getting filled up due to the fall in oil demand. Jim Burkhard reveals the inability of the available storage facilities to cater for a fall in oil demand of about 25%. Indicating that, the next viable option of shutting down the oil drilling rig and ending the oil production process could negatively affect the oil reservoir.
In reaction to reports on increased oil inventory build, Jim Burkhard further says that the U.S. might risk the effects and shut down oil production if production continues at its present rate since the increased oil supply will exceed all their oil storage options. Jim Burkhard estimated a possible decrease by nearly a third in U.S. oil production by 2021.
Therefore, this cancels the option of shutting down oil production and emphasizes the need for oil storage facilities by oil storage providers.