PDVSA asked Brazilian counterpart Petrobras to remove its oil from a PDVSA-owned oil storage facility in the Bahamas in order to make room for the Venezuelan state oil company’s own crude oil, a Petrobras source said Tuesday.

Petrobras is currently using tank capacity at PDVSA’s BORCO terminal in the Bahamas to store some of its export crudes such as heavy Marlim crude, that it sells on the U.S. Gulf Coast market.

The Borco tank facilities have a crude oil storage capacity of 4 million barrels and storage capacity of 8 million barrels for products.

“We are talking with PDVSA about the (contract termination) notice. We had expected them to take back the tanks sooner or later,” the source said, adding that Petrobras would have to leave the facilities eventually.

Ship brokers have been closely watching since reports that PDVSA had given Petrobras 60 days to empty the tanks surfaced. Petrobras has not yet acted to fix shipping to transfer its crude supplies to another location.

The Petrobras source said it was unlikely PDVSA was seeking to increase the storage charge Petrobras was paying for the tank capacity.

Crude oil storage capacity in the United States and the Caribbean has filled up rapidly as the strong contango in forward NYMEX crude oil prices is encouraging refiners to store crude oil today for use in the future, when the market expects oil prices to be $2 to $3 per barrel higher.

Oil traders also speculate that heavy oil producers are running up against limits in upgrading capacity in the U.S., making it difficult to place all of the heavy oil barrels being produced. Saudi Arabia recently said it was struggling to find buyers for all of its heavy oil production.

Besides Petrobras, trading firms Westport and Vitol use the Borco oil terminal to store oil products. These two companies have not received any notice for contract termination.

PDVSA has several tank facilities in different locations in the Caribbean, which it uses to manage its oil logistics.