Shell in Talks to Book Tankers for Crude Floating Storage
Royal Dutch Shell is in discussions to charter at least three supertankers to store around 6 million barrels of crude oil at sea, shipping sources said on Wednesday.
Shell has provisionally booked the vessels, known as very large crude carriers (VLCCs), for storage options for at least three months, the sources said, adding that the fixtures were still to be concluded.
A Shell spokeswoman declined to comment.
If fully fixed, these would be the first tankers to be used for floating storage after the recent fall in oil prices.
Oil prices and the broader crude market pricing structure collapsed in recent days after OPEC and other major producing nations ended an output cut deal.
A glut of crude oil in global spot markets is forcing the price of oil for immediate delivery below forward futures costs, known as a contango structure, making it potentially profitable to buy oil, store it offshore onboard vessels and sell it later at higher prices.
Brent crude futures for nearby delivery are trading at their biggest discount to the November contract in over four years, according to Refinitiv data.
(Reporting by Jonathan Saul and Ron Bousso. Editing by Jane Merriman and David Evans)