Is It Worth It to Buy a Used Tanker and Fill It With Cheap Oil? An Investigation

[OAITW r.2.0]

Tech by VICE
Is It Worth It to Buy a Used Tanker and Fill It With Cheap Oil? An Investigation
If you have millions of dollars just laying around, we have got the deal for you!
By Jordan Pearson
Apr 21 2020, 12:48pmShareTweetSnap

IMAGE: FLICKR/BERNARD SPRAGG. NZ

In yet another example of the world economy shell game coming to a hard stop amid the coronavirus pandemic, oil is incredibly cheap as demand plummets and speculators panic sell and even pay others to store it in a desperate bid to never actually possess the barrels they bought on paper.

This situation reveals both the absurdity and fragility of how the world is currently organized, but, given that during previous oil gluts traders stored oil in old tankers, it also made me wonder: Would it be worth it for a random guy like me to buy a used oil tanker and fill it with cheap oil to make a profit later? Since that idea isn't any more absurd than continuing to pump oil out of the Earth in the first place, let's take an exploratory and incomplete (possibly incompetent) dive into the economics of storing oil:


The ship
There seem to be a decent number of oil tankers for sale in the world right now, judging by the listings from Horizon Ship Brokers, which is sort of like Craigslist but for multi-million dollar industrial ships.

While most prices are available upon request, listed prices tend to run from $10 to $20 million USD, and the ships run the gamut in terms of their capacity. The ideal ship for this plan needs to hit a balance of affordability and ample capacity, given, ahem, the current uncertainties in the oil market. Yes.

More at: https://www.vice.com/en_us/article/5dm7mn/buy-tanker-during-coronavirus-oil-prices?utm_source=digg

Last paragraph is the point....

[Laelth]

1. Fascinating thought experiment.

And a well-written article. Thank you for posting.

-Laelth

[lapfog_1]

2. yup... you could potentially double your money

This rough math is definitely missing a lot of factors (cost of crew and maintenance, fees, and other expenses), but the point isn't that you could actually make money if you bought a rusty oil tanker. The point is that the world we've built on pumping oil incessantly and trading it on markets is absurd and capitalism is uniquely incapable of properly administering goods in a crisis, or any other time. It's the same reason why farmers are destroying crops and dumping milk while people go hungry, and why I'm considering buying an oil tanker.

[OAITW r.2.0]

3. That's the point!

Tell me there aren't money fund managers thinking seriously of starting an investing syndicate to attract buyers into this scheme....

[Dustlawyer]

4. You can buy an old barge that transports oil for $30,000.

That price has probably gone up recently though.