More than 280,000 tonnes of petrol stored on Singapore, Malaysian waters

Singapore

AT least three more ships loaded with petrol are now anchored off Malaysia and Singapore, Asia's top oil trading centre, taking the total volume of petrol sitting in the region to more than 280,000 tonnes (2.4 million barrels), three trade sources said on Wednesday.

Oil demand across the world has slumped as governments restricted people movements to curb the spread of Covid-19, prompting sellers and traders to store all types of excess oil onboard ships.

Swiss trading company Trafigura is storing the motor fuel onboard Panamax Georg Jacob and Energy Centurion while Norwegian refiner Equinor has petrol onboard Aframax Sloane Square, the sources said.

Ship tracking data from Refinitiv Eikon showed the petrol onboard Trafigura's ships came from India and South Korea, while Equinor is storing petrol from its refinery in Norway. These three ships can carry over 170,000 tonnes of petrol, an amount that can fill some 92 Olympic-sized pools.

Trafigura and Equinor declined to comment. The two trading companies are the latest to store petrol in the region after Asia's top petrol importer Pertamina stocked up the fuel in April onboard three Panamaxes.

Although parts of the world are gradually easing restrictions on people movements, fuel supply continues to exceed demand which has far from recovered.

"Indonesia's doors are somewhat closed (to sellers). Myanmar is also overflowing with oil," said a source who tracks petrol trades in the region.

According to data intelligence firm Kpler, the volume of clean petroleum products - petrol, diesel and jet fuel - being stored at sea around Singapore is on the rise.

A total of 10.73 million barrels of these fuels were contained on floating storage vessels, an increase of 97 per cent from 5.44 million barrels on April 28, Kpler said in a May 8 report. Kpler added that 2.55 million barrels of petrol are now on the water, on top of nearly 1.96 million barrels of jet fuel, two types of oil products that are not traditionally stored on ships unlike diesel.

The use of tankers to store clean products had previously sent freight rates for such ships to all-time highs but the rates have started to ease.

"Floating storage for products might get more feasible now on Long Range 2 vessels," said a ship broker, adding that freight rates for LRs came off to 300 worldscale points this week from a high 500 points.

An LR2 tanker can carry around 80,000 tonnes of clean products. REUTERS

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