Floating storage of oil grows
November 17, 2025
The energy markets are flat this morning as we start a new week. Prices rallied late last week on the news that a Ukrainian drone strike on a Russian port halted exports. This port has reopened and is seeing some exports, but the market is currently maintaining a risk premium. The outlook remains for an oil surplus in Q1 of 2026.
It is being reported that oil in floating storage is growing as Russian and Iranian oil is finding it harder to find a home. Crude oil is loaded onto tankers, but once the ships have been idle for more than 7 days, the crude is considered stored rather than in transit. Reports show that Iranian crude floating in storage doubled to 36 million barrels from August to November. Floating storage in Asia has climbed 20 million barrels in just the last two months. All of this speaks to the outlook for abundant crude oil.
Baker Hughes reported that the oil rig count rose by 3 to 417. Last year, there were 478 oil rigs in operation at this time. The number of oil rigs has remained steady in the 410-415 range since early July, and the current 13% drop year-over-year has become the new normal. Natural gas rigs were off last week, but producers have sustained growth in gas-focused drilling activity as higher prices are rewarding producers who have previously faced a glut of natural gas from primary and associated sources. The focus has now shifted to meeting demand growth coming from the wave of LNG export capacity buildouts and increased power generation demand for data centers and other industrial applications.