HYDROCARBON
ENGINEERING
11
I
n the latest oil crisis caused by
crude prices plunging 50% over
the second half of 2014, traders
turned to storage to hedge
against a protracted supply glut.
The same strategy of stockpiling
was deployed in 2008 when Brent
crude went the other way, surging
to a record high of over
US$145/bbl on fears of supply
shortages. The storage sector’s
status as the oil industry’s all round
performer in good and bad times has
largely been cemented in Asia over
the past two decades where
traders have refined the art of
stockpiling and blending with
futures trading, pricing and just in
time logistics to buy and sell oil.
Storage has played a key role
in shaping Asia’s oil trade following
the first two oil shocks of 1974 and
1979 that broke the international
distribution system controlled by the
supermajors. Asia’s rapid oil and gas
demand growth, liberalisation of its
energy sector, the rise of futures trading,
and the waning influence of the supermajors
have created demand for independent
