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The global slump in jet fuel demand in the wake of the coronavirus outbreak and the current contango structure for jet fuel prices has in recent days encouraged a series of bookings for jet fuel floating storage in the coming period. Given current demand conditions, we observe that some level of floating storage is already underway in the European region.
Tankers wait offshore
Two tankers laden with jet fuel originating in Asia have been sitting offshore Malta for at least seven days, Vortexa data show, underlining that the global demand shock is forcing barrels into operational floating storage as various demand centres are unable to quickly soak up previously scheduled deliveries, also prompting diversions.
Long Range tanker (LR1) Pacific Debbie is floating offshore Malta as of 1 April, having updated her declaration from Isle of Grain — a major UK inlet for jet fuel — on 21 March. She loaded her cargo from Sikka, India in early March.
Similarly, LR1 Cielo Rosso is also laden with jet fuel, and began sitting offshore Malta from 21 March. She loaded her cargo back in late February from Singapore.
More than a dozen tankers have been booked for clean products floating storage in the coming weeks and that figure will undoubtedly rise.
Under normal market conditions, it would be rare to see jet fuel tankers anchored offshore Malta. The Mediterranean island is tiny importer of the product, compared to other countries in the region such as Italy and Spain.
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