Experts predicted a shortage of oil storage facilities in case the OPEC+ deal goes down

Experts think that all countries will face a shortage of oil storage capacity if OPEC+ fails to close a new deal.

On the eve of April 9, OPEC+ countries confirmed their intention to reduce oil production by 10 million barrels per day in May-June. Further, by the end of the year, the OPEC+ countries will reduce production by 8 mn barrels per day, and further by April 30, 2022 – 6 mn BPD.

At the same time, it is stressed that all these agreements will be valid only with the consent of Mexico, which at the moment is ready to reduce production by only 100 thousand BPD instead of the proposed 400 thousand BPD. The negotiations will continue in the afternoon of April 10.

There are no unified statistics on storage capacity.

“Rough estimates give a figure of 1.5-2 billion barrels of free storage tanks around the world. Under current conditions, if the deal is not accepted, when countries increase production and demand decreases by 20-30 mn barrels per day in April-May, storage capacity will be sufficient for 2-3 months”.

According to Igor Yushkov, an expert at the Finance University under the Government of the Russian Federation, if the transaction is not, it will have a negative impact on all countries.

“Within a month, all warehouses will be filled, and still everyone will have to stop production. Just because there will be no place for oil to go,” concluded the expert.