The importance of liquid terminals and storage to the world oil market has been highlighted by the dramatic drop in crude oil prices, the International Liquid Terminals Association (ILTA) has said.
ILTA President Kathryn Clay said in an online statement: “Liquid terminals are probably the most important business you’ve never heard of. Terminals play an essential role in balancing the market. That was clearly demonstrated with the recent sharp drop in crude oil prices, which in turn, lowered refined product prices.”
Oil traders and producers are looking for places to park their oil and refined products until demand rises, they are looking to terminals. Terminals, however, have limited space, and tanks are filling up faster than even the experts expected.
Clay said: “Terminal storage improves the flexibility of the entire supply chain and provides an ability to respond to market fluctuations. We usually have surplus storage even during periods of oversupply and lax demand. The global pandemic changed all the rules.”
She also noted that storing liquids is only a fraction of what terminals do. They also provide essential logistic services, including blending and organizing inbound and outbound transportation. While the storage part of the business is strong, throughput – or the amount of product flowing into and out of the terminal – is down sharply.
For more information visit www.ilta.org