Waterborne Transportation

Crude oil tankers are used to transport crude oil from fields in the
Middle East, North Sea, Africa, and Latin America to refineries around the world. Product
tankers carry refined products from refineries to terminals.
Tankers range in size from the small vessels used to transport refined products to huge
crude carriers. Tanker sizes are expressed in terms of deadweight (dwt) or cargo tons.
The smallest tankers are General Purpose which range from 10 to 25,000 tons.
These tankers are used to transport refined products. The Large Range and Very Large
Crude Carriers (VLCC) are employed in international crude oil trade. The size of tanker that
can be used in any trade (commercial voyage between a port of origin and destination) is
dependent on the tanker's length and loaded depth and the size of the loading and
unloading ports.
The larger ships are used because they reduce the cost to transport a barrel of crude oil.

As of 2006:

The world tanker fleet had 4,186 vessels with a carrying capacity of 358.8 Mdwt.

84% of the tanker fleet were owned by independent tanker companies.

The average age of the fleet was 11.9 years.

68% of the vessels are double hull ships.

Click on the link to see tanker video - Shipping is Big Business.
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Shipping Costs
The following table illustrates the costs between different locations.


Source


Discharge


Cargo
Cargo Size,
Thousand
Barrels

Worldscale
Rate
Freight
Costs, $/B
Caribbean New York Distillate 200 215 2.46
Caribbean Houston RFO 380 70 0.90
Caribbean Houston RFO 500 73 0.94
N. Europe New York Distillate 200 158 2.91
N. Europe Houston Crude Oil 400 82 2.22
West Africa N. Europe Crude Oil 910 71 1.60
West Africa Houston Crude Oil 910 74 2.27
Persian Gulf Houston Crude Oil 1,900 36 2.08
Persian Gulf Japan Crude Oil 1,750 48 1.61
Persian Gulf N. Europe Crude Oil 1,900 36 1.51
[Source: Average data for February 2009 as published in the Oil & Gas Journal from Drewry Shipping Consultants Ltd.]
As illustrated in the above chart, types of cargo and distance determined freight rates.
Note the different costs for distillate deliveries to New York from the Caribbean and N.
Europe.
Also see the differences among shipments of crude oil to Houston from N. Europe, West
Africa and the Persian Gulf.
The size of the ship used also affects costs as seen by the costs to deliver RFO (residual
fuel oil to Houston from the Caribbean.
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Oil Spills
Although they get most of the publicity, oil spills only account for 12%
of all spills. The major cause of ocean oil pollution is industrial waste
(61%). Tanker accidents contribute 5% and tanker operations account
for 7%. Other shipping accounts for 14%. Better operations and
improved ship design have helped reduce the number of large spills.
During the decade from 1985-1994, the frequency of large spills
declined by 57%.
Although the Exxon Valdez gets blame for the "world's largest oil
spill," it's only the 52nd biggest spill. Iraq's Saddam Hussein gets the "credit" for the
largest.
U.S. tankers are constructed and operated under strict regulations. Companies use a
communication network of telephone, telex, and satellite systems to locate their tankers.
On board the ships, crews follow strict safety measures, minimizing loss of personnel and
product. Automatic collision avoidance systems track approaching ships, alerting a tanker
to an obstruction on its course.
There have been many developments in improving the tanker operations to reduce the
frequency and amount of oil spilled. At one time, tankers discharged dirty ballast water
(oil mixed with sea water into the ocean). Improvements have been made in tanker design
and now discharge of oily water is now illegal. In the past, after oil tankers discharged
their cargo, they pumped sea water into the oil storage containers to provide ballast for
the return trip. When the ship arrived at the loading port, this oily ballast was discharged
into the ocean and crude oil was pumped into the ship's containers. Now new tankers have
segregated ballast tanks. These ships have tanks that are solely used for ballast and water
and oil are kept apart.
New tanker design also requires ships to have double-hull
construction in accordance to the Oil Pollution Act of 1990.
Double-hull construction is required on new ships built after
1993. These vessels now represent 14% of the world's tanker
fleet.

<="" span=""> For tanker spill information, please see The International Tanker Owners
Pollution Federation Limited.
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Storage Facilities
Crude oil and refined products are stored in tanks for shipment to
other locations or processing into finished products. There are four
basic types of tanks used to store petroleum products: (1) Floating
Roof Tank used for crude oil, gasoline, and naphtha, (2) Fixed Roof
Tank used for diesel, kerosene, catalytic cracker feedstock, and
residual fuel oil, (3) Bullet Tank used for normal butane, propane,
and propylene, and (4) Spherical Tank used for isobutane and
normal butane.
The amount of crude oil and refined products in storage is reported by Energy Information
Administration. While the actual volume is important, a better index is the number of
days of supply available. This number reflects the volume that can be supplied to run
refineries (crude oil) or the volume of refined products that are available to meet demand.
Please click on the link Crude Oil and Product Stocks
Please click on the Energy Information Administration's Topics for Petroleum Stocks
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Oil Pipelines
Pipelines are the most efficient method to transport crude oil and
refined products. Pipelines are used to move crude oil from the
wellhead to gathering and processing facilities and from there to
refineries and tanker loading facilities. Product pipelines ship gasoline,
jet fuel, and diesel fuel from the refinery to local distribution facilities.
Crude oil is collected from field gathering systems consisting of
pipelines that move oil from the wellhead to storage tanks and treatment facilities where
the oil is measured and tested. From the gathering system the crude oil is sent to a pump
station where the oil delivered to the pipeline.
The pipeline may have many collection and delivery points along
route. Booster pumps are located along the pipeline to maintain the pressure and keep the
oil flowing. The delivery points may be refineries, where the oil is processed into products,
or shipping terminals, where the oil is loaded onto tankers.
A pipeline may handle several types of crude oil. The pipeline will schedule its operation to
ensure that the right crude oil is sent to the correct destination. The pipeline operator sets
the date and place when and where the oil is received and the when the oil will arrive at
its destination. Crude oil may also move over more than one pipeline system as it journeys
from the oil field to the refinery or shipping port. Storage is located along the pipeline to
ensure smooth continuous pipeline operation.
After crude oil is converted into refined products such as gasoline,
pipelines are used to transport the products to terminals for movement to gasoline
stations. In addition to gasoline, products pipelines are used to ship diesel fuel, home
heating fuel, kerosene, and jet fuel. Because product pipelines are used to move many
different products, the different types of products are shipped in batches.
Batching is used to move two or more different liquids through the same pipeline. The
liquid are transported in a series of batches. The adjoining batches mix where they come
into contact. This mixed stream may be sent to refinery for re-refining, sold as a lower
valued product such as a mixture of premium unleaded gasoline with regular unleaded
gasoline, or sold as mixture. Many product pipelines have standard product specifications.
This allows one company to ship gasoline over the line and get not be concerned whether
he receives gasoline from that same batch. Its all the same quality. Individual additive
packages are added at the distribution terminals.
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World Oil Transit Chokepoints
In 2009, total world oil production amounted to approximately 84 million barrels per day.
About one-half was moved by tankers on fixed maritime routes. With the onset of the
global economic downturn that began in mid-2008, world oil demand declined, and along
with it the volumes of oil shipped to markets, both via pipelines and along maritime routes
such as these chokepoints. By volume of oil transit, the Strait of Hormuz leading out of the
Persian Gulf and the Strait of Malacca linking the Indian and Pacific Oceans are two of the
worlds most strategic chokepoints.
The international energy market is dependent upon reliable transport. The blockage of a
chokepoint, even temporarily, can lead to substantial increases in total energy costs. In
addition, chokepoints leave oil tankers vulnerable to theft from pirates, terrorist attacks,
and political unrest in the form of wars or hostilities as well as shipping accidents which
can lead to disastrous oil spills.
Please see World Oil Transit Chokepoints report prepared by the Energy Information
Administration for more information.
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References
Check out the following references to learn more about drilling operations:

Oil & Gas Pipelines in Nontechnical Language, Thomas O. Miesner and William L. Leffler.
Click on the following links to learn more about oil transportation:

From T-2 to Supertanker: Development of the Oil Tanker, 1940-2000, Andrew G.
Spyrou.

Colonial Pipeline Company

FERC

Intertanko Annual Report and Review 2005

Oil Pipeline Companies

Pipeline 101

Poten & Partners

Shell Oil Company - Pipelines and Tankers

Tanker Operations

Texas Monthly Condensate Report

Texas Monthly Natural Gas Pipeline Report

Trans Alaskan Pipeline System

Pipeline Transport - Wikipedia

Oil Tanker - Wikipedia