Vitol CEO: Oil supply is squeezed by geopolitical factors

Vitol CEO Russell Hardy stated on Thursday that the global oil market has tightened despite predictions of an 'oversupply'. U.S. sanctions have limited the?outlets? for Russian and Iranian oil, which is causing a?increase in demand for oil from alternative sources.

Due to sanctions, Russia and Iran have become increasingly dependent on China. India has agreed to stop buying Russian oil under the pressure of U.S. president Donald Trump.

Hardy, speaking at the International Energy Week in London, said that the overall demand for non-sanctioned crude oil has increased. This is tightening the oil market, while sanctioned crude oil remains in floating storage in the high seas.

He said that Russian oil production was resilient to sanctions for the past four years, since Russia invaded Ukraine. However, there are fewer and less outlets for Russian crude oil.

Hardy stated that "cracks have begun to appear, and the geopolitics of the moment are?definitely increasing pressure on the supply-side."

He added that "Traditional purchasers of these two supply'sources' (Russia and Iran), are now looking for Western or Saudi sources. This is tightening up the market."

Brent crude oil futures have risen almost $10 in the first half of the year despite predictions by forecasters of an oil glut in 2026.

Vitol will be the largest commodity trading company in the world by volume of oil sold. It is expected to sell 7.2 million barrels a day (bpd).

Hardy stated that 2025 was the busiest year ever for their oil trading business. The company has yet to release its official figures for 2025.

LONG-TERM PLAN

Hardy, Vitol's CEO, said that the company expects a modest growth in global oil demand until the electrification of transportation fuels begins to take hold.

Vitol's latest long-term outlook for oil demand, published on Monday, shifted its prediction of when global oil prices will peak from the end decade to the mid-2030s.

Hardy said that this was due to the slowdown of electric vehicle sales, and a U.S. shift in politics back towards hydrocarbons.

Vitol's forecast for 2040 is that oil demand will be 5 million barrels per day (bpd) higher than it was in 2025, when the company predicted 2040 to be similar to current levels.

Vitol's report also showed that the company forecasted peak oil demand as high as 112 millions bpd.

(source: Reuters)