Tracking the Oil Movements

oil tanker. image from wikpedia

The oil he industry counts on a small group of little-known companies whose main job is to count the number of tankers leaving ports, at best using data gathered from satellites, at worst using simple binoculars. They then guess how much crude is being carried by measuring the depth of the vessels in the water.

Swiss-based Petro-Logistics S.A., one of those companies, calls its work “the art and science of tanker tracking,” with the aim being to discover what oil producers “are really doing as distinct to what they say they are doing,” according to a statement on its website. While the information produced by companies such as Petro-Logistics and U.K.-based Oil Movements serves as a main input for estimates by consultants, traders and official bodies, it’s not the only measurement stick in use.

The matter becomes even more complex for oil moved within pipelines. Russia, for instance, exports roughly 30 percent of its crude via pipeline, according to official data. That flow is most often measured by independent groups using infra-red photography, which provides only a rough approximation of output.

The Organization of Petroleum Exporting Countries traditionally has published a measure of production based on what the group calls “secondary sources,” in effect consultants who calculate flows from a variety of sources, including tanker tracking data. The cartel also publishes production figures based on what OPEC countries release publicly.

The IEA and the U.S. government also publish estimates, as do many news organizations, including Bloomberg. The most recent addition to this flood of information is the Joint Organisations Data Initiative (JODI), a project begun in 2002 that’s backed by some of the world’s richest countries.Although all of these sources rely on tanker-tracking data as a base of their data, each group also incorporates its own market intelligence and different methodologies to come up with their data

Excerpt from the Art and Science of Tanker Tracking, Bloomberg, Mar. 14, 2016

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