Energy trader Vitol Highlights The Issue With Oil Products Market

While Vitol does not disclose net profit, it reportedly achieved a record $15 billion in 2022, as per a non-public balance sheet. (Credits: Vitol Group)

On Tuesday, Vitol, the world’s leading energy trader, highlighted the tightness in the global oil products market, attributing it to the Red Sea crisis and the diversion of Russian products.

CEO Russell Hardy noted that this situation has led to record volumes of oil products being stored on tankers at sea.

Hardy stated, “While European road transport demand will begin to wane by the mid-2020s, in the near term, we anticipate continued tightness in the market and an ongoing call on European refining.”

The rerouting of Russian crude oil and products away from Europe to India and China has necessitated Europe to seek alternative sources, particularly for gasoil, Hardy pointed out. (Credits: Vitol Group)

He also mentioned that the redirection of Russian products and Houthi attacks in the Red Sea have resulted in unprecedented levels of oil products being stored “on-water.”

Vitol, being the world’s largest independent oil trader with a significant presence in liquefied natural gas and power markets, revised its outlook on oil demand, projecting it to peak in the early 2030s, a few years later than previously anticipated.

Vitol forecasts a 1.5 million bpd increase in global refined product demand this year.(Credits: Vitol Group)

Despite a decline in revenue to $400 billion in 2023, down more than 20% from the previous year due to weakened oil and gas prices following the 2022 price spikes triggered by Western sanctions on Russia over its invasion of Ukraine, Vitol’s crude oil and product volumes only marginally decreased by 1.6% to 7.3 million barrels per day (bpd).

Although there was a 10% decline in crude volumes, this was partly offset by increases in gasoline and gasoil volumes, according to the firm.

Nate O'Hara
Nathan is a seasoned commerce writer with a passion for unraveling the intricacies of the business world and distilling them into engaging narratives. During his academic journey, he delved deep into subjects like economics, marketing, and entrepreneurship, honing his analytical skills and developing a keen understanding of market dynamics.