Shut US pipeline makes refiners seek storage on oil tankers

Firms are chartering oil tankers for floating storage and to move gasoline, diesel, sending rates through the roof.

Oil tanker charter rates skyrocketed in the U.S. with refiners scrambling for ships to store fuel that has nowhere to go due to a cyberattack on the country’s main pipeline. Companies such as Marathon Petroleum Corp, Valero Energy Corp and Phillips 66 were in the process of chartering several oil tankers for floating storage, according to shipbrokers who asked not to be identified. Ships can serve as offshore tanks during unexpected oversupply situations, such as last week’s shutdown of the Colonial Pipeline that halted fuel flows from refineries to customers along the East Coast. “There’s no longer a market,” said shipbroker Simpson Spence Young in a May 10 report. It’s become “a smash and grab scenario with charterers focusing on securing tonnage.”