“Floating” oil has been floating around at sea for years. Now it has disappeared and the buyer is suspected to be China

Since 2016, the presence of ships storing oil in the oceans has been used as a thermometer to measure the market for crude oil from sanctioned countries, such as Iran, Russia or Venezuela. China appears to have eliminated them.

The oil that floated behind the West. Until now, floating oil has been accumulating with an oversupply that has not met demand. An average of 140,000 barrels are left without a destination every day.

Sanctioned oil is cheaper, but with crude oil at record lows, there was no point in potential buyers riling up the United States and its partners in order to save a few dollars.

Punishment and strategy game. Well, the thermometer is off. According to him Latest report According to the International Energy Agency (IEA), floating oil has fallen to historic lows since records began. Once crude oil prices rose, someone decided it was a good time to absorb the sanctioned oil, leaving the seas virtually empty.

the Analysts believe China has been accumulating this oil at a competitive price to promote the reopening of its economy and fatten its strategic reserves, a move not without risks, but a bold one. Sanctioned oil, oil that Beijing buys at a cheap price.

Impact of the epidemic. The COVID-19 pandemic has swelled crude oil storage volumes to staggering numbers. When the world began to get rid of the virus, prices began to rise, and then the scarcity of oil began floating in the parallel market.

2023 was a record year for China in crude oil imports, with a breathtaking number: 11.3 million barrels per day. Although Beijing denies that the imports come from Iran or Venezuela, the sanctioned oil is disguised as imports from Malaysia, a country with little oil production.

More geopolitical tensions in 2024. Supply and demand for oil dance a complex dance between the search for economic growth and emissions reduction goals in the face of climate change.

Tensions in the Middle East and supply disruptions in North America led to a new rise in prices. This year, China, India and Brazil account for 78% of the growth in demand. With floating oil all but extinct, they will have to pay more per barrel if they want to continue to supply themselves.

Image | Wilfredo R. Rodriguez H. (CC0 1.0)

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