Producers are pumping way more oil than the locked-down world can use, and storage tanks are filling up fast. After oil is extracted from the ground, it has to be either used or stored. But usage has plummeted since the coronavirus outbreak, with planes grounded and car trips curtailed to limit contagion. An estimated 40% of the world’s population is currently advised to stay home, according to the U.S. Energy Information Administration. Storage tanks could be filled sometime in May, despite a recent deal announced by OPEC and its allies to curtail production by nearly 10 million barrels per day, according to analysts at S&P Global Platts. In some cases, producers are renting old ships to store the oil, President Donald Trump said in a recent press briefing. “There’s oil all over the oceans right now,” he said. “The boats are all filled. ” Trump has said he may buy oil for the Strategic Petroleum Reserve to help alleviate the problem, but Congress has not appropriated the money. Meanwhile, the Department of Energy is negotiating with oil companies to use those tanks.
