It has been revealed that there are currently 27 oil tankers with more than 20 million barrels of crude onboard anchored off the coast of Southern California,

The tankers are waiting to offload their cargoes as coronavirus pandemic shatters demand for oil and

With storage facilities are at full capacity the tankers have no option but to anchor and wait essentially becoming floating storage. 

The below video was filmed by Petty Officer, Aidan Cooney who works for the US Coast Guard the principal federal agency responsible for maritime safety, security and environment stewardship in U.S. ports and waterways. The video was filmed off the coast of Southern California on 23rd of April 2020. 

Responding to environmental concerns the coast guard said:

“Due to the unique nature of this situation, the U.S. Coast Guard is constantly evaluating and adapting our procedures to ensure the safety of the vessels at anchor and the protection of the surrounding environment,” said Cmdr. Marshall Newberry, from Coast Guard Sector Los Angeles/Long Beach.

“Coast Guard watchstanders, in partnership with the Marine Exchange of Southern California, are closely monitoring each anchorage to manage the increased number of tank vessels we’re seeing off the California coast.”

Floating storage has been in growing demand as onshore storage fills up amid continuous oil production.

According to Paris-based Kpler SAS, as of Aril 20, on a global scale onshore crude storage sits just below 3.5bn barrels and floating storage is at 153 mb. There has been a combined increase of 111 mb since the end of March and increasing by the day.

Given the current oversupply, both OPEC+ and countries outside the organization would have to cut back on their production not to exhaust storage capacity by the end of May.

However, if demand for floating storage continues taking VLCCs and Suezmaxes from active trading, it is likely a new round of inflated tanker rates would ensue soon.