Sanctions Ripple Effect: Oil Afloat in Record Volumes
Western sanctions on Russia and Iran have led to record volumes of oil stored on vessels, preventing a surplus supply from destabilizing global markets. Experts at the ADIPEC energy conference discussed the impact of these sanctions and potential oversupply challenges in the coming months.
The imposition of Western sanctions on Russia and Iran has resulted in unprecedented volumes of oil being stored in vessels, effectively preventing a potential oversupply from destabilizing global markets, according to Gunvor Group's CEO, Torbjorn Tornqvist.
The sanctions, primarily from the EU, UK, and US due to Russia's actions in Ukraine, currently include embargoes on leading Russian oil producers Rosneft and Lukoil. Despite the disruptions, surplus oil supply has helped to cushion the impacts, maintaining market stability and reducing price volatility, Tornqvist stated at the ADIPEC energy conference.
The situation has led to an unprecedented amount of oil being dislocated and held on tankers. With ongoing production increases from OPEC and non-OPEC countries, the global oil supply could surpass demand by up to 2 million barrels per day next year. However, sanctions remain a significant factor in curbing excessive supply.
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