Vitol, the world’s leading energy trader, highlighted a tight global oil products market on Tuesday, attributing the situation to the Red Sea crisis and the redirection of Russian products, which has led to record levels of oil products being stored on tankers at sea. CEO Russell Hardy emphasized the ongoing tightness in the market and the continuous demand for European refining, despite an expected decline in European road transport demand by the mid-2020s.
The rerouting of Russian crude oil and products to markets like India and China has compelled Europe to seek alternative sources, particularly for gasoil. The disruptions caused by the rerouting of Russian products and Houthi attacks in the Red Sea have resulted in unprecedented levels of oil products being held “on-water.” Vitol also revised its projection for oil demand peak to the early 2030s, slightly later than previously anticipated. The Swiss firm reported a revenue decline to $400 billion in 2023, primarily due to weakening oil and gas prices following the price surges in 2022 amid sanctions imposed on Russia.
Despite the revenue drop, Vitol’s crude oil and product volumes experienced a marginal decrease of 1.6% to 7.3 million barrels per day, with increases in gasoline and gasoil volumes partially offsetting a decline in crude volumes. The company foresees a growth in global refined product demand by 1.5 million barrels per day this year. While Vitol does not disclose net profit, the Swiss trader achieved a record $15 billion in 2022, based on a non-public balance sheet.