How Surging US Oil Output Is Being Moved and Stored

Tracy Alloway (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:15)

And I'm Joe Weisenthal.

Tracy Alloway (0:16)

Joe, do you remember that time I bought a barrel of oil?

Joe Weisenthal (0:19)

That was a classic moment in a, well, yeah, that was classic.

Tracy Alloway (0:25)

You can say it, in all of financial journalism.

Joe Weisenthal (0:27)

In all of financial journalism, were you actually, it wasn't a barrel though.

Tracy Alloway (0:31)

No, it wasn't.

Joe Weisenthal (0:32)

Let's be honest here, let's be honest.

Tracy Alloway (0:33)

It wasn't, I tried to buy an actual barrel.

Joe Weisenthal (0:36)

It was like a gallon, right?

Tracy Alloway (0:37)

It was basically a jar of crude oil. I'm really happy I didn't buy an entire barrel in the end because part of the experience of doing this was I realized how difficult it is to actually move and store oil. Oil is a dangerous thing.

Joe Weisenthal (0:55)

Yeah, you had it on the desk next to us and then you left, right? Like you left for Hong Kong or you left for Abu Dhabi and left the oil and like a bunch evaporated.

Tracy Alloway (1:03)

I'm not sure I should tell this story, but I couldn't figure out how to dispose of my jar of crude oil, so I just procrastinated and left it on the desk and it slowly evaporated and poisoned my colleagues.

Joe Weisenthal (1:15)

We all inhaled oil fumes for months and months and months on end.

Tracy Alloway (1:18)

Sorry about that Joe.

Joe Weisenthal (1:19)

Sorry, I survived.

Tracy Alloway (1:20)

All right, well, I bring it up because I'm very, very curious about the business of storing and transporting oil right now. And part of the reason is because as we've been discussing on this podcast, we had a really great episode with our colleague, Javier Blas, for instance.

US oil production is at a record. I think it's like more than 13 million barrels per day now.

Joe Weisenthal (1:42)

Yeah, it's really extraordinary. Obviously the US just production booming like crazy. And you know, you mentioned that episode with Javier, when we talk about oil most of the time, right? We're talking sort of like macro, like who are the big producers?

How much global demand is there? What is the trajectory? What's happening in shale? What is happening in Saudi, et cetera? But as we like to do from time to time, like these aren't just numbers on the screen.

Oil is definitely not just a number on the screen. And if you want to go long oil, if you want to, if you're bullish on oil, like you might be able to do that with a few clicks, but someone somewhere-

Tracy Alloway (2:16)

You don't want to take physical delivery.

Joe Weisenthal (2:18)

You probably don't want to, but someone somewhere has to have the physical, I don't know if it's counterpart or the physical exposure to meet your financial obligation. So if your trade oil futures, someone there like I assume takes the other side on some level by having exposure to the physical product, which means worrying about disposal, delivery, storage tankers and so forth. And so like the sort of the side of the business that's not usually talked about, we should talk about.

Tracy Alloway (2:45)

Absolutely.

And just going back to that episode with Javier, I remember one of the themes from that was how much oil production patterns have changed in the past few years. And so I'm very curious if the storage and transportation patterns are also changing. So I'm pleased to say we really do have the perfect guests to dive into the business of storing and moving oil. We're going to be speaking with Steven Barsamian. He is COO at the Tank Tiger and also the co-host of the Tank Talk podcast. So a fellow podcaster. Steve, thank you so much for coming on Odd Lots.

Steven Barsamian (3:19)

Thanks, Tracy. Thanks for having me. Thanks for having me, Joe.

Tracy Alloway (3:22)

Maybe just to begin with, talk to us about what the Tank Tiger actually does. I was looking at the website. You describe yourself as a clearing house for terminal storage.

And if you go to the website, Joe, I don't know if you've done this yet.

Joe Weisenthal (3:35)

I have.

Tracy Alloway (3:36)

But you can look at basically kind of want ads for storage. It's like looking for, you know, specialty chemical storage, this amount, or I have available this amount of storage for a particular product.

Steven Barsamian (3:52)

Yeah, I mean, Tracy, you kind of nailed it there. That's kind of what we do.