This month, OPEC+ agreed to accelerate oil output hikes for a second consecutive month in June as the group looks to punish over-producing members. OPEC leaders are also contemplating a similar increase in July, and could bring back as much as 2.2 million barrels-per-day (bpd) of supply to the market by November, Reuters reported earlier.
A secondary objective of the OPEC+ supply hikes is to win back market share from U.S. producers, who ramped up output to record levels in recent years while the OPEC+ was making deep supply cuts.
Brent crude futures slumped last month to a four-year low of $58.40 a barrel on fears the coming surge in OPEC+ supply could coincide with a global economic slowdown stemming from U.S. President Donald Trump’s trade war.
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Sliding prices sent a signal to traders to store oil until prices recover, especially as the market structure shows a glut of supply forming next year, said Steven Barsamian, chief operating officer at The Tank Tiger.
Crude oil storage demand on The Tank Tiger’s platform has almost doubled from May to 3 million barrels for June, Barsamian said. Buyers have made inquiries for storage tanks across most U.S. trading hubs, including those in the country’s Midwest and along its Gulf Coast.
“We have not seen this kind of an uptick in crude storage demand since the COVID-19 pandemic,” Barsamian said.
New requests for June slowed over the past few weeks as the market recovered slightly on signs of progress in U.S. trade talks, but that only pushed the storage requests further out on the calendar.
Barsamian’s team is now working on a request to find storage for crude oil next January at the Cushing, Oklahoma hub, an unusually long lead-time, he said.
“It shows how negative the market sentiment is if we are even getting a request that far out,” he added.
U.S. crude oil inventories rose unexpectedly in the past two weeks and now stand at about 443.2 million barrels, the highest since July 2024, according to data from the U.S. Energy Information Administration.
(Reporting by Shariq Khan in New York; Editing by David Gregorio)
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