Delivery of oil bought through futures contracts
<p>What happens if someone is forced to take physical possession of many barrels of oil that they bought on the open market, but they have no storage space left to put it?</p>

<p>ETA: In <a href="https://law.stackexchange.com/a/50891/10">jeffronicus answer below</a>, the buyer has options on how to accept the oil. This question aims to find out what happens if the buyer is out out of options. All space is full. The storage where the oil currently sits is contracted to someone else so they insist on delivering the physical possession of the oil.</p>

<p>Another clarification: The scenario is that the price of oil has crashed to the point where storing the oil is more expensive than the oil.</p>

<p>For example, per the <a href="https://www.cmegroup.com/content/dam/cmegroup/rulebook/NYMEX/2/200.pdf" rel="nofollow noreferrer">New York Mercantile Exchange Rulebook</a>, there are several methods for accepting delivery of light sweet crude oil futures, including just recording new ownership of product that's already sitting in a storage tank:</p>

<blockquote>
  <p>At buyer's option, such delivery shall be made by any of the following
  methods: (1) by interfacility transfer ("pumpover") into a designated
  pipeline or storage facility with access to seller's incoming pipeline
  or storage facility; (2) by in-line (or in-system) transfer, or
  book-out of title to the buyer; or (3) if the seller agrees to such
  transfer and if the facility used by the seller allows for such
  transfer, without physical movement of product, by in-tank transfer of
  title to the buyer.</p>
</blockquote>

<p>There are also provisions for negotiating alternative delivery procedures.</p>

contract-law finance cftc