Clarksons estimates that 120 vessels are now at anchor off Singapore and other ports.
An increase in floating storage off Singapore and other international ports is prompting analysts to offer several explanations for the phenomenon, but the most obvious theory seems to be there simply aren't enough buyers for the oil at current prices.
Tracking undertaken by the International Energy Agency indicated that at the end of May just under 94 million barrels of unrefined crude oil was in floating storage, while data quoted from London shipping analyst Clarksons showed there were 120 vessels at anchor around the world.
This follows a report published by Reuters showing that 47.7 million barrels of oil is in storage on tankers in the Straits of Malacca, about half of the world's global daily crude supply and the highest level in five years.
Kim Iskyan, founder, Truewealth Publishing
Weak demand is forcing oil to be put into storage, and the market is now looking for new locations to store the unsold crude
In noting that the waters off Singapore and Rotterdam are hot spots for these vessels, Chris Baraniuk, writing for BBC.com, echoes the sentiments of many experts who say it's simply a matter of onshore storage tanks being full.
Andrew Wilson, oil market analyst at the IEA, says, "At key terminals we have seen capacity being built out over the last five years, but stocks have ballooned," and he adds that the amount of stored oil at Rotterdam is "approaching record levels."
Another theory most onlookers reject is that a floating storage contango is unfolding, whereby oil traders keep oil at sea until prices rise: but prices aren't rising quickly enough for this to be feasible.
Kim Iskyan, founder of Truewealth Publishing in Singapore, agrees that onshore storage is no longer an option but digs deeper into why: in Singapore Business Review he writes, "Simply put, it is because there aren't enough buyers for all the oil at these prices; weak demand is forcing oil to be put into storage, and the market is now looking for new locations to store the unsold crude."
He goes on to state that banks are experiencing a spike in interest from oil traders who need to finance their floating storage requirements.
Iskyan concludes, "So it seems as if they have no choice but to keep all this oil on tankers; and it is also likely that the oil will only be sold at lower prices."
Experts have spent most of 2016 warning that onshore storage is rapidly reaching capacity, the latest one to do so being John Kilduff, partner at Again Capital, who earlier last week cited the phenomenon while stating that overproduction and weak demand, not Brexit, is a key concern that analysts should closely monitor.