Oil Transportation and Storage

Vincent Kaminski

Oil and refined products are transported over long distances and in large volumes. This is due to a number of factors. Oil fields are mostly located in places removed from the consuming markets where the end users are concentrated. The refineries, for economic and historical reasons, are clustered closer to the markets, mostly around seaports and along major transportations routes, such as rivers and canals, or major rail lines. The availability of crudes and refinery configuration often result in a composition of regional supply that does not correspond to the structure of final demand. This requires exports of final surplus products and imports of deficit products. This is true, for example, of Western Europe, where the automobile transportation fleet is heavily dependent on diesel. Europe often has a surplus of gasoline, which is shipped to the US and other markets, sometimes with significant consequences for refinery margins in the importing countries.

Unlike for natural gas, the shippers of oil and refined products may have to rely on many different transportation modes. Oil may be shipped by the Baku–Tbilisi–Ceyhan pipeline to a port in the Mediterranean, loaded on a tanker