2019 Year in Review


With 2019 drawing to a close, let’s look at the news stories and events that shaped the year, as chronicled on this site.

Every week, we published a new blog aiming to show how Ursa data can be used to better understand the global oil market.

Below is a sample of the topics covered.

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OPEC+ deepens supply cuts

OPEC and partners decided in December to increase the size of production cuts for the first three months of 2020

What prompted the move? Global crude inventory data from Ursa showed the existing cut wasn’t aggressive enough to sufficiently tighten the oil market.

Lowering oil inventories was an objective of the supply cuts, Saudi Arabia’s then-oil minister Khalid Al-Falih said earlier this year.

That left OPEC+ with a clear choice, especially for Saudi Arabia, which couldn’t afford to let oil prices slip just days before Aramco’s much-anticipated initial public offering.



Source: Ursa

The December OPEC meeting marked a departure from much of 2019 when economic concerns dominated oil news coverage. Remember the inverted yield curve?

It wasn’t easy to say whether sluggish oil prices better reflected sentiment or weak demand. We turned to global crude inventories for a reality check.

The spotlight turns on Saudi Aramco

2019 marked a new beginning for Saudi Arabia’s oil industry. The inner workings of the country’s crown jewel — Saudi Aramco — were largely secret until the country’s leadership decided to list shares.

A company prospectus issued November 9 outlined Aramco’s structure & holdings that, ironically, contradicted oil-related information previously reported by Saudi Arabia.

The discrepancy, over crude inventory levels, highlighted a widespread problem with obtaining reliable economic data from governments around the world.

In this context, we’re filling a void by providing objective measurements on crude inventories using radar satellite imagery.

The prospectus also revealed information on the damage caused by the Sept-14 attacks and the status of the recovery effort.


Abqaiq, Saudi Arabia

Imagery: Planet Labs, Annotations: Ursa

Attacks on Saudi Arabia’s oil infrastructure

It was arguably the most significant event in the oil market since Iraq’s invasion of Kuwait before the 1991 Gulf War.

The September 14th attack against Saudi Arabia’s oil infrastructure damaged the world’s largest oil processing facility and the country’s second-largest oil field.

How quickly could Saudi Aramco repair the Abqaiq processing facility? How much crude does Aramco have in inventory? How long will those reserves last?

We provided answers to these critical questions through daily measurements of Saudi storage sites and satellite imagery analysis of the attack sites.

Regular updates allowed clients to know the extent of inventory draws, when inventories began to refill, and visualize the damage.


Source: Ursa

Natural & man-made disasters

When Hurricane Dorian struck the Bahamas in early September, getting updates wasn’t easy with the slow-moving storm making it difficult to get on-the-ground news coverage.

Some of the best information about the hurricane came from satellite imagery, specifically synthetic aperture radar (SAR).

Using SAR imagery, we showed a time lapse of Grand Bahama between August 31 and September 4. You can see large areas of land submerged underwater.


Satellite imagery: e-Geos, SI Imaging Services

Illustration: Ursa

A pair of man-made disasters destroyed the Philadelphia Energy Solutions’ refinery and damaged a chemical plant and surrounding area in Deer Park, Texas.

In Deer Park, we assessed the scale of damage using SAR imagery, which (unlike optical) can work in any weather, day or night.

That distinction is obviously relevant in this case when dark smoke obstructed the view.

A pipeline bonanza

A major development in 2019 was the start-up of three pipelines connecting the Permian Basin with the Gulf Coast.

This extra takeaway capacity alleviated a bottleneck that had formed when supply from the West Texas & New Mexico oil fields strained existing pipelines.

Ursa monitored the construction of EPIC, Cactus II and Gray Oak pipelines for customers using satellite imagery.

This image below, for example, captures the Gray Oaky Oak pipeline reaching a key terminal 15-20 miles outside the Corpus/Ingleside area.

Imagery credit: SkySat (Aug 7, 2019)

Annotations: Ursa

The focus now turns to the Gulf Coast where companies are building new docks and ports to facilitate exports.

Additional capacity will exacerbate a trend already underway. US exports surged in 2019 causing Gulf Coast inventories to fall.

Specifically, the draws occurred away from refineries, such as the Louisiana Offshore Oil Port (LOOP), the only place currently capable of fully loading a VLCC tanker.

US sanctions 

It’s no secret that sanctions and tariffs are tools favored by the current White House administration to accomplish foreign policy objectives.

Sanctions imposed on Venezuela, Iran and Syria targeted oil sales and purchases.

In each country, changes to crude inventories seemed linked to policies coming from Washington.

Sanctions against Venezuela made it more difficult for state-owned oil company PDVSA to sell oil overseas, causing crude inventories to build.

The amount of crude in storage at Kharg Island — Iran’s main export terminal — built steadily after waivers expired early May that allowed eight countries to buy Iranian crude.

Source: Ursa

The US Treasury Department upped efforts to prevent oil exports to Syria. Without fresh supplies arriving, storage tanks at Baniyas began to drain a few months later.

China’s mega-refineries come online 

No one can seriously doubt the significance of China’s economy to the rest of the world. The same is true for the oil market.

The fortunes of oil producers largely rise and fall based on China’s appetite.

That China’s oil imports hit record highs in 2019 was a bullish sign when you consider those barrels were consumed, rather than go into storage.

China’s inventories actually fell starting in the summer after a period of builds. The main catalyst was the pair of new mega-refineries (Rongsheng and Hengli) beginning service.

Rongsheng Refinery

Satellite imagery: Planet Labs

Alberta curtails production

Alberta’s efforts to address an oversupply causing Western Canadian crude prices to collapse showed signs of success.

Mandatory production limits began January 1. Starting mid-May, Alberta crude inventories began to draw, hitting an all-time low the week of August 15.

Source: Ursa

What’s next? Our global oil storage product will continue to expand by adding new sites on top of our existing coverage.

This process began in October, with the US, where we added 15 new sites (~83 million barrels), raising total US coverage to 31 sites (~565 million barrels of capacity).

We’ll turn next to China, the Middle East & North Africa, South America and Asia.

If you’re interested in a free evaluation of our data, please sign up here.

Happy Holidays!




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