How much oil is being stockpiled around the world? No one really knows, but here's our best guess
Every month, the Paris-based International Energy Agency (IEA) and OPEC publish their best guess of the the total volumes of petroleum products held in storage by OECD¹ countries. The most recent estimates put OECD stockpiles somewhere in the neighbourhood of 5.7 billion barrels.
To be more precise, that's 1.6 billion in commercial stockpiles, 3 billion held in Strategic Petroleum Reserves and about 1 billion floating in supertankers out at sea.
But that's only a small part of the picture. OECD members only represent 35 countries and exclude some of the world's largest oil producers, including the Middle East, Russia and China. Trying to estimate how much oil is sitting in storage tanks, caverns and supertankers around the world is no easy task.
Strategic Petroleum Reserves (SPR) are crude oil stockpiles mandated by governments to provide a cushion in the event of an energy crisis. SPRs typically comprise of only crude oil and exclude stockpiles of gasoline and other refined products.
OECD SPRs have held relatively steady in recent years at about 3.05 billion barrels. The US makes up the largest component of those OECD barrels, roughly 695 million barrels of oil. That represents about 150 days of domestic consumption should imports be reduced to zero. In 2005, the US announced plans to increase their SPR to 1 billion barrels but have since decided to start selling part of their reserves to finance government spending.
Japan has the second largest SPR stockpiles within the OECD, roughly 324 million barrels. South Korea is a close third with 286 million barrels emergency reserves held by government and industry.
The EU requires all member states to hold 90 days of SPR inventories. Spain holds 120 million barrels of crude in SPR. Germany holds 70 million barrels; France has 65 million barrels.
The International Energy Agency (IEA) has mandated all 28 of its members to hold at least 90 days worth of emergency stockpiles. However, net-exporters (such as Canada and Norway) are exempted from this rule. Although Canada does not have a government-mandated SPR, it does hold over 60 million barrels of oil in commercial storage, mostly located at refineries and large tank farms in Alberta and Saskatchewan.
But there are significant SPR stockpiles building outside OECD member states and most of those countries do not officially report volumes in storage.
India's SPRs covers about 2 weeks of domestic consumption, or approximately 37 million barrels. South Africa has an SPR capacity of about 45 million barrels.
Countries that are large oil exporters have relatively small SPRs. Russia has emergency stockpiles of only 14.7 million barrels. Iran holds about 10 million barrels. Kuwait's SPR is only 2 million barrel.
In total, the US Energy Information Administration (EIA) estimates that 4.1 billion barrels are held in SPRs around the world.
The China factor
The largest stockpiles outside the US are in China. The Chinese government doesn’t regularly report the capacity or storage level of its strategic reserves. Officially, the government has announced plans to increase its SPR to 476 million barrels. JPMorgan estimates China's SPR to be just over 510 million barrels.
But that's just government-mandated petroleum reserves. The storage capacity of China's private oil companies is estimated at 1.68 billion barrels. That's a huge jump from only a few years ago when China's total petroleum inventories were reported to be closer to 700 million barrels.
In the old days, companies and governments held petroleum stocks in floating supertankers when oil prices were in contango, which occurs when future oil prices are much higher than the current spot prices. But that isn't so much the case anymore. Logistical and marketing issues (i.e., full storage tanks and marine traffic jams) have forced many agencies to store their crude and final products in floating supertankers, which can hold up to 2 million barrels of oil.
OECD countries report 1 billion barrels of oil being held up at sea. But most of the world's supertankers are hovering around Asia, which go unreported. Reuters estimates the volumes of crude stuck in traffic jams to be approximately 200 million barrels.
Adding it all up
The total volumes of oil and petroleum products in storage around the world is anybody's guess. The IEA estimates OECD stockpiles, including SPR, represent approximately 60% of the world's petroleum reserves. Since OECD commercial and SPR volumes was 4.7 billion barrels in July, that would put the total world oil reserves somewhere in the 8 billion barrel range.
That number sounds actually about right. US total reserves top 2 billion barrels. China's numbers are not far behind. OECD countries (ex. USA) hold 3.7 billion.
That works out to about about 80 days worth of global consumption or production
1. OECD countries comprise of 35 members: Canada, the United States, Mexico, Chile, Turkey, Israel, Australia, New Zealand, Japan, South Korea and 22 European Union countries (excluding Bulgaria, Croatia, Cyprus, Lithuania, Malta, and Romania). OECD inventories include crude oil, liquids and refined products.
2. Source: "Crude Congestion" by Reuters.