Tanker owners are happy. VLCCs and Suezmaxes are generating
strong cash flows and charterers are rushing to procure tonnage in
an increasingly tight market. Commentators estimate that 40-50
older VLCCs have been commissioned on long-term charters to store
crude. Are there any legal concerns with tankers being used for
floating storage? Tanker owners see less risk in their tankers
sitting stationary than sailing the high seas, but need to ask
where they will anchor, for how long and whether this changes the
applicable regulatory regime. If a 'storage tanker' is
actually a floating storage unit (FSU), there is increased
permitting required and a reduced ability to limit liability under
the International Convention on Civil Liability for Oil Pollution
Damage. While the Convention imposes strict liability for pollution
damage on the Owner, it does allow for this liability to be
limited, absent actual fault of the Owner. This reduction in
liability does not apply to FSUs
