(projector buzzing)
- [Narrator] This is the world's largest
oil processing plant,
located in the Eastern Province of Saudi Arabia.
Early on Saturday, September 14th, a series of explosions
rocked the facility, and the world woke to see it burning.
- [Reporter] Satellite images show thick black smoke
billowing from the Aramco Oil Facility in Abqaiq.
- [Reporter] The nation's state-run oil company,
Saudi Aramco, has temporarily closed its facilities,
which many experts expect will cause a lack of supply
leading to higher global oil prices.
- [Narrator] But while the world was looking over here,
energy traders on Wall Street and elsewhere
were also looking over here and here and here
at thousands of storage sites around the world
where companies and countries stockpile oil.
What's inside these tanks
can be valuable information for traders
who make big bets based on how much supply is available
and where in the world it's located.
For traders, an event like the one in Saudi Arabia
can be an opportunity. (dramatic orchestral music)
- So in the event of, you know, market crisis situations
or disaster events, there's a natural increase
in volatility, and we do see increased interest
from our client base and from prospective clients.
- [Narrator] Mario De La Ossa is an energy specialist
at Orbital Insight, a company that estimates
the tanks' contents using satellite imagery,
artificial intelligence, and a lot of complicated math.
- I guess to say, well, we are quite proud
of our coverage levels, which are on the order
of seeing about 80% of the world's oil tanks every week.
- [Narrator] Orbital is at the vanguard of firms
that sell data to hedge funds, energy companies,
and others who are looking to anticipate oil price moves.
To get their hands on the data,
the first thing Orbital had to do
was find as many of these tanks as it could.
Employees train computers to spot them
by feeding them image after image of oil tanks.
Once the computers got the picture,
they scanned satellite imagery
and found more than 25,000 tanks around the world.
Orbital is constantly collecting images of each tank
which its computers then examine to estimate their contents.
The key to doing that lies in the shadows,
particularly those cast upon the tops of the tanks.
- [Mario] A floating roof tank goes up and down
according to the volume of oil that's inside of the tank,
and that's done to prevent a vapor space from forming
that would be very bad in terms of explosion risks.
- [Narrator] Orbital's computers measure the shadows cast
on and around the area of each tank.
The shadow cast to the outside
is used to determine the size of each tank,
which can range from 50,000 barrels to more than a million.
The shadows cast inside the structure
is used to measure how much oil is inside the tank.
Generally, the bigger the shadow,
the less oil there is inside.
- So we have that going for us,
that where the position of the roof is,
it will correspond to the volume of oil inside of the tank,
but then to actually calculate the specific volume,
this does become, you know, complex
in terms of aligning the exact position of the satellite,
the position of the sun
to adjust for the shadow length that was cast.
- [Narrator] Orbital then adds up the volumes
and compares them over time,
noting when stockpiles grow and shrink in different regions.
The company is able to do this quickly,
beating official reports by weeks and sometimes even months,
and they can offer insight to parts of the world
where supply data are scarce or suspect.
- So how much is there in, let's say, Cushing, Oklahoma,
and that's fairly well-tracked.
What's not fairly well-tracked,
and this is one of the big problems
for people on the marketplace, is how much oil is in China,
because the Chinese don't openly disclose that.
Historically, 80% of the market has just been very dark.
(pleasant electronic music)
- [Narrator] Knowing how much oil is out there
and where it's stockpiled
is useful to a range of businesses.
Energy producers use it to decide whether to drill wells.
Refiners that turn crude into products like gasoline
and jet fuel wanna know when to buy their main ingredient.
Hedge funds and other speculators simply wanna make money.
These traders might act on clues
that stockpiles are dwindling
by buying oil now and selling it later once other buyers
realize supplies are low and the price goes up.
Predicting changes in the availability
and thus the price of oil can be incredibly lucrative.
Andy Hall, who advises Orbital,
is one of the most successful
and well-known oil traders of recent decades.
He made a fortune buying boatloads of cheap oil
before Saddam Hussein invaded Kuwait in 1990,
which touched off the first Gulf War
and sent crude prices soaring.
Traders like Hall are always looking
for ways to gauge oil supply.
They count the rigs that are drilling wells
and measure what's passing through pipelines.
They train cameras on import and export loading docks
and count tankers moving through waterways
like the Houston Ship Channel and the Strait of Hormuz.
Firms like Orbital have taken this kind of detection
to a whole new level.
Before the attacks on Saudi Arabia,
Orbital observed a lot of shrinking shadows
on the tops of the kingdom's oil tanks,
suggesting that it was building up its stockpiles,
but after the attacks, the shadows began to grow,
which meant that Saudi Arabia
was tapping reserves to satisfy customers,
but the firm didn't just look there.
It looked at China, where tanks were full,
and the U.S., which were also well-stocked,
and in Japan and South Korea, which were not,
and in India, where the shadows were growing
as imports from Saudi Arabia dwindled.
Meanwhile, back on Wall Street and in Houston
and London and Singapore, traders placed their bets.
(dramatic piano music)