In the latest sign that the world is simply running out of capacity when it comes to coping with an inexorable supply of commodities, three diesel tankers en route from the Gulf to Europe did something rather odd on Wednesday: they stopped, turned around in the middle of the ocean, and headed back the way they came!
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In a former life, I wrote air pollution permits for storage tanks in Texas.
There's a hell of a lot of petroleum tanks in this state, but apparently they are now mostly full. Building new tanks is a slow, expensive process not really worth doing if there is no demand for the product.
Back in the day, the US might have taken advantage of these low oil prices to top off the so-called "strategic petroleum reserve". No one has even mentioned that lately, and I don't think we have any money which could be used for that purpose.
I believe this latest "oil war" has at least two objectives:
1. Screw Russia by keeping oil prices down, thereby weakening the BRICS alliance; and
2. Deplete existing fields to force the world off its fossil fuel habit.
Enjoy the low gas prices while you can. They won't last.