In an oil sector first, the oil-rich United Arab Emirates (UAE) has offered free oil to India in return for a storage deal at India’s planned underground facility as the supply glut worsens and some analysts predict that ‘’peak storage” could sending prices crashing further.
The UAE’s Abu Dhabi National Oil Company (ADNOC) has agreed to store crude oil in India’s maiden strategic storage facility, sweetening the deal by saying India could take two-thirds of the oil for free.
It’s a great deal for India, which is almost fully reliant on imports to meet its crude oil needs.
India has lured Abu Dhabi in with the building of a massive underground storage facility system that will be able to take on 5.33 million tons of crude as a bulwark against global price shocks and supply disruptions.
ADNOC is eyeing half the storage capacity at one of the new underground facilities, Mangalore, which has a 1.5-million-ton capacity on its own. Abu Dhabi plans to stock 0.75 million tons, or 6 million barrels of oil, here, and 0.5 million tons will belong to India.
The deal is reflective of a wider, global storage panic and talk of what could happen when we reach ‘’peak storage’’. A number of analysts have suggested that oil prices might crash to $20, or even $10 a barrel, if storage tanks become full.
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Next up: NIRP for oil. Why is no one asking the question why no one is buying oil? I suppose the real question is why no one is talking about the global economic collapse.
David DeGerolamo
“Why is no one asking the question why no one is buying oil?”
I did as soon as I read the article. I just figured the world economy is way worse than anyone will admit. But then I guess it does not seem like it since there are no food lines and such. But then again there is the huge amount of welfare being spread around. So that makes one wonder when that money will run out. That is when reality will hit people like a sledge hammer.
so why oh why is the U.S. not buying up all the excess crude and storing it in the “stratigic reserve”?? oh yea……global warming….