Cargo has piled up at ports due to the COVID-19 pandemic. Picture: WANG HE / GETTY IMAGES
Cargo has piled up at ports due to the COVID-19 pandemic. Picture: WANG HE / GETTY IMAGES

London — Dozens of tankers holding jet fuel and petrol are at anchor in sea lanes around Europe’s main storage hubs, unable to discharge their cargoes as onshore tanks are full to capacity after the collapse in demand linked to the coronavirus crisis.

Nearly a million tonnes of refined products are parked on about 30 tankers off Europe’s coast, Reuters calculations found. According to shipping data and trade sources, tankers have dropped anchor near to the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub, and across parts of the Mediterranean, as their cargo owners struggle to find buyers or storage tanks. While some vessels are expected to dock soon, others could remain at sea for weeks because of a shortage of space left to be leased in onshore tanks, traders say.

“The region is overflowing with products,” one trader said on condition of anonymity. Traders and shipping sources said there were long delays at tanker terminals in the ARA area, lifting costs for traders chartering the vessels.

“Congestion has picked up in the past few days,” a shipping source said. Ship chartering deals may “now be impacted”.

Low Rhine River levels have added to logistical pressure on ARA storage. They mean barges can be loaded to only 50% of capacity, limiting how much they can take to storage sites along the river. Most of the vessels carry jet fuel, petrol and naphtha, often blended into petrol, all of which have seen a huge drop in demand after restrictions on movement around the world to curb the spread of the novel coronavirus. At least three are carrying diesel, according to the data.

Two tankers — Stena Polaris and Andrea Victory — that have been leased in recent weeks by BP to store fuel offshore for two to three months are anchored off the east coast of England, Refinitiv data showed. BP declined to comment.

Refineries around the world have reduced operations and in some cases shut down. As a result, several European refiners cannot unload crude oil.

Consultants Rystad Energy forecast oil demand in Europe in 2020 falling by 2.3-million barrels a day (bpd) to 12.7-million bpd, a 11.2% decline from 2019’s 14.3-million bpd. They expect Europe’s April road fuel demand to fall 35% to 4.7-million bpd.

The International Energy Agency (IEA) on Wednesday forecast a fall of 29-million bpd in April oil demand to levels not seen in 25 years, and said no output cut by producers could fully offset the near-term falls facing the market.