Unusual
VLCCs are normally not used to store heating oil because their tanks have to be scrubbed of crude oil first, but newbuildings do not have that problem. The ships can hold about 2 million barrels of heating oil, more than three times the amount held by a long range two tanker (LR2). Several traders are reported to have inquired about similar transactions. (1)

Germany
It is likely that the products for the Front Queen are delivered by smaller tankers coming from refineries in the Mediterranean and the Black Sea region. Here also the consumption of heating oil is considerable, as well as in Germany. Within 2-3 month the building up of the winter stock will start over there. In June – July 2008 the consumer prices for heating oil in Germany reached an unprecedented peak of approx. € 950 per 1000 litre. Without surcharges and VAT, this is approx. € 715. (1000 litres heating oil, but also diesel, weigh 845 kilo). Taking currency differences into account, the August price is less than half the record of 2008. In 2007 the German consumption of heating oil was 17 million tons of which 60% by households. Because German refineries do not produce enough heating oil, the deficit is imported from and via Rotterdam.
Rotterdam
The Port of Rotterdam is Europe’s most important hub for crude oil, but also for heavy fuel oil, kerosine, diesel and heating oil. Demand for the latter product is still strong from Germany. In order to take advantage of future price increases, the intermediate traders need storage capacity.
The Rotterdam capacity is one of the largest in the world but most of it is leased out on long term contracts. Therefore short term traders and financial interests turn their face to floating storage. Its attractiviness depends on regional price differences (‘arbitrage’) and the charter rates of vessels plus additional costs such as cargo insurance and tank cleaning if necessary. The charter rates are influenced by the available number of ships in the relevant categories of size and the empty availability within the loading/unloading windows of just a few days at specific terminals.
In a quantative perspective, floating storage is certainly as relevant factor. For example, the earlier mentioned two million barrel capacity for heating oil of a VLCC corresponds with some 300,000 million m3 of tank storage ashore. This equals a quarter of the capacity of a, in global terms, major terminal for mineral oil products.Vopak in Rotterdam Europoort, the largest products terminal in the world, offers a capacity of some three million m3.