Ending Stocks of Crude Oil and Petroleum Products Reach All-Time High
The Problem
On July 17, 2020, the Energy Information Administration (EIA) reported that inventories of crude oil and petroleum products had exceeded 2.1 trillion barrels. This represented a significant increase in the amount of oil and petroleum products that were being held in storage. The primary cause of this inventory build was the ongoing excess production of oil and petroleum products. Many oil-producing countries continued to pump large quantities of crude oil to maintain market share and generate revenue. However, as global demand for oil and petroleum products decreased due to COVID-19, this excess production led to a surplus that needed to be stored. The high inventories of crude oil and petroleum products negatively impacted crude and refined product pricing, causing prices to fall. Consequently, many oil-producing countries and companies faced significant revenue drops, forcing cuts in production and exploration. The long-term recovery of oil markets from this oversupply remains uncertain.
Altiras’ Solution
Altiras addressed oversupply and storage issues caused by the COVID-19 pandemic and resulting price drop. By repurposing distressed fuels, Altiras offered sustainable solutions to manage excess inventory and support the oil market. Their approach included reclaiming and repurposing waste streams or byproducts to extract valuable components and create alternative products. Altiras also offered services such as bulk fuel recycling, customized fuel formulations, and fuel recovery from decommissioned tanks. These efforts helped reduce the surplus of crude oil and petroleum products in storage and provided alternative solutions for managing excess production.
The Conclusion
On April 20, 2020, WTI crude oil futures prices plunged to negative numbers, highlighting severe oversupply. This historic event, driven by oversupply and reduced COVID-19 demand, emphasized the need for better infrastructure and storage capacity. Altiras’ proactive measures to address these issues demonstrated their commitment to providing resilient and flexible solutions in the face of unexpected events. By repurposing and recovering distressed fuels, Altiras contributed to stabilizing the oil market and promoting sustainable practices. This approach not only helped manage the immediate surplus but also ensured a more resilient and adaptive response to future challenges in the global oil market.