By the end of May, the world oil storage will be full; thus, US companies have launched negotiations to lease trains to store the "black gold".
The storage method will cost be cheaper than the tanker method. One loaded wagon will cost 300-450 US dollars per month, i.e., about 1.5 USD per barrel.
Russian oil companies also plan to rent railway tanks from the Russian Railway, and if the issue is settled in favour of oil companies, the Russian Railway will face a real nightmare.
As Russian President's Press Speaker Dmitry Peskov says, the Kremlin expects to see the effect of the OPEC + deal in a few days.
He says the deal implementation has not yet begun (the production reduction is scheduled for May and June), but prices are not the main problem of the oil market currently.
In his words, the rapid fill of the world storage is more dangerous.
"Fears are growing that the reserves at the key storage hub in Cushing, Oklahoma will reach the limit," Peskov said.
As Tank Tiger CEO Ernie Barsamyan states, the current monthly cost of storage in Cushing is about 60 cents, and it is approaching one USD for short-term (six-month) contracts.
In other words, for half a year, the tenant of a conventional storage facility will pay 5-6 USD per barrel, and a floating fee will be higher by 12-22 US dollars.
Reuters reports that currently there are 30 tankers off the European coast, that cannot be unloaded due to full storage facilities.
Notably, Russia has the most modest reserves out of three leading oil-producing countries.
Bela Gelashvili
News Author