A few days ago, the Maran Apollo, a 1,100-feet long oil tanker, left the U.S Gulf of Mexico for the Chinese port of Rizhao hauling a cargo of two million barrels of U.S. crude. Sitting for almost two months, the supertanker held demand-less crude during the coronavirus outbreak. This crude sitting on the tanker is known as medium-heavy sour crude and is now in high demand because of its higher content in sulfur and denseness. Sour crude is typically from Canada and the U.S. Gulf Coast whereas West Texas Intermediate (WTI) is a “sweet” crude oil. WTI, which is typically lighter and is less expensive to produce. Known as “sour” which is typically undesirable for both processing and end-product quality, it’s the kind of oil that Saudi Arabia and its allies produce. Urals of Russia and Arab Light from Saudi Arabia are normally two of the most widely consumed in today’s market, but crude is in increasingly short supply due to record output cuts by the two nations and their allies.
Economic busts are no stranger to the energy industry. Workers have become familiar to the roller coaster ups and downs of employment in the energy sector, but is 2020 the year of a paradigm shift or is it simply another economic shock that shall soon pass?
Prices in the oil sector are under pressure today prompted by a gigantic build in distillate inventories last week as reported in today’s Department of Energy (DOE) petroleum report.
The first quarter of 2020 has absolutely rocked global oil markets due to COVID-19, an OPEC+ supply and price dispute as well as a global economic recession. What happens next is still unknown, but with global storage on the brink of filling up and demand destruction nearing 20 million bpd, the global oil industry will almost certainly change forever. IOCs (International Oil Companies) and smaller independents face particularly daunting challenges, while NOCs (National Oil Companies) look to capture more market share while putting their competition out of business.