Goldman Sachs Group Inc. predicts that the world’s biggest offshore oil supermarket, which is providing with anti-pollution rules, will upend energy markets.
We are in the Strait of Malacca, off Singapore and Malaysia. This is not just a waterway that connects supply from the Middle East, Africa and the United States to Asia, but has also been used over the last decade to store millions of barrels of oil for future sales. Now, with new ship-emissions regulations taking effect in 2020, operators are using the channel to accumulate fuels for which demand will increase.
Some of the top trading houses are beginning to gather a flexible, low-cost floating tank farm in the Strait of Malacca.
This fleet of tankers has the task of receiving, storing and reselling products such as low-sulfur fuel oil, diesel and light-cycle oil in what would actually be a mini supply and distribution center at sea.
And that’s in advance of January 1st, when International Maritime Organization rules will require ships around the world to stop burning dirty fuel and use a relatively cleaner supply.
At least five vessels are currently anchored near Singapore with low-sulfur fuel oil and other blending components as of April 19. They consist of long-range tankers, very large crude carriers and floating storage and offloading vessels that can each hold about 700,000 bbl to 2 MMbbl. Charterers include Japan’s Mitsui & Co. and Germany’s Uniper SE.