Storage

Storage and warehousing of oil and natural gas help smooth out supply and demand discrepancies. We store more when the prices are lower than we would like, and withdraw when prices are high. The cheapest storage method is underground spaces, such as depleted reservoirs. This method is primarily used for natural gas; finished oil products cannot be stored in underground natural spaces per regulations. Above-ground tanks are used for crude and refined oil, finished oil products, and natural gas. At retail locations, like gas stations, tanks are stored underground for safety reasons. Tanker ships are used for temporary storage when land storage is at capacity, making it the most expensive option. There is a minimum operating level of crude oil that cannot be removed from pipelines, refinery tanks, and the overall system without difficulties.