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Global tank terminal markets: Current status and outlook

Patrick Kulsen, Managing Director at Insights Global, provides an overview of his talk on the global tank terminal market that will take place later this month at Tank Storage Asia 2019.

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Author: Patrick Kulsen

To say that the global tank terminal business is large is an understatement. Over 4,900 tank terminals provide more than 1 billion cubic metres of storage capacity. The industry has grown at an annual growth rate of 3 percent since 2005 and, in coming years, another 10 percent will be added to global tank capacity. Some might argue that capacity has grown too fast and that we are approaching a situation where markets are ‘over-tanked’. But is this really the case? This is the question that many industry players need answering. If you’re a business development manager at a tank terminal, the answer to the question determines if and where to invest. If you’re an investor in infrastructure assets, it guides you in valuating terminal assets.      

Clearly, understanding the balance between supply and demand for terminal markets is very important. One thing to keep in mind is that terminal markets are, on the one hand, very local in nature. On the other hand, these markets are driven by global factors, such as trade flows and commodity price dynamics. This makes things rather complex. Still, Insights Global’s model on terminal functions can be used to unravel the complexity.

According to this model, a tank terminal can have multiple functions:

  • Logistics/hub function
  • Trading platform
  • Strategic storage

The prime function of every terminal is its logistics or hub function. Some terminals are also used as trading platforms. Physical commodity traders, for instance, require terminals for their business model. The last function that a terminal can have is to store crude oil products as part of a country’s strategic petroleum reserves.

It is the logistics and trading platform functions of terminals, plus the value this brings to clients, that act primarily as business indicators for tank terminal markets. These are:

  • Commodity price dynamics
  • Inventory levels
  • Trade flows

If you’re analysing business at a specific terminal, you need to look at these factors in the local context. However, for the purpose of this piece, I’ve looked at these factors on a global scale and have focused on oil markets.  

Oil Price Dynamics

Currently, oil price levels are low and rather volatile. This stimulates demand and the increased volatility creates trading opportunities. The forward curve is upward sloping (backwardation), which weighs on arbitrage opportunities. However, some institutions, like the U.S. Energy Information Administration (EIA), are forecasting a slightly oversupplied global crude market. This could soften the backwardation, or even flip it into a contango, which would be good news for the terminal sector.     

Inventory Levels

Global crude and oil product inventories are on the lower end. This is related to the backwardation price structure. Because of this, tanks are being slightly underutilised right now.  

Trade Flows

Global crude and oil product trade flows have been increasing at a steady rate in the last decade. This rate is aligned with the growth rate in tank capacity. The balance between the two rates is a very positive reality.     

The Future is Bright for the Terminal Business  

The main conclusion from the above analysis is that the global tank terminal market does not seem to be over-tanked and, in fact, the current situation is set to improve significantly after oil price dynamics change to fully support the terminal business. 


Patrick Kulsen will join over 20 world-leading industry experts speaking at Tank Storage Asia 2019’s CPD-certified conference programme, taking place at Singapore’s Marina Sands Expo & Convention Centre on the 25th and 26th September 2019. Top terminals, traders, oil majors and analysts will analyse the key trends shaping the industry and visitors will leave with new ideas, inspiration and business growth plans. For more information visit   

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