Crude Floating Storage Fell 40% in Year to End of 2022

The amount of crude held in floating storage has declined significantly during the past six months according to the IEA. Floating storage held 79.5mbbls by the end of 2022, down nearly 40% from the year before equating to about supply of 100kbpd last year.

• The strong crude oil backwardation discourages floating storage with near term higher prices encouraging sales when shipping contracts expire.
• Iran was forced to put oil into floating storage in 2020 and 2021 due to western sanctions. Iran had more than 100mbbls held in tankers at the peak last year but has sold a significant volume since June according to Bloomberg sources.
• Iranian oil accounts for about 50% of all the crude and condensate in floating storage according to IEA estimates.
• Building floating storage will be one of the key indicators that Russia is struggling to place its barrels and may be forced to cut production.