Oil tankers carrying enough crude to satisfy 20% of the world’s consumption are gathered off California’s coast with nowhere to go as fuel demand collapses.
Almost three dozen ships — scattered in waters from Long Beach to the San Francisco Bay — are mostly acting as floating storage for oil that’s going unused as the coronavirus pandemic shutters businesses and takes drivers off the road. Marathon Petroleum Corp.’s refinery in Martinez, Calif., has been idled and others, including Chevron Corp.’s El Segundo refinery, have curtailed crude processing as the state orders residents to stay at home.
The more than 20 million barrels of crude is the highest volume of crude to ever float off the West Coast at one time, according to Paris-based Kpler SAS, which tracks tanker traffic. About three-quarters of those tankers are holding oil in storage, meaning they have been floating steadily for seven days, also a record.
Storage has become increasingly scarce as a growing supply glut collides with collapsing fuel demand. As traditional oil tanks have filled, excess oil has been pushed onto tankers to float off Singapore, the U.S. Gulf Coast and, now, the U.S. West Coast.