Sanctions keep record amounts of oil at sea – prices rise

Western sanctions against Russia and Iran have led to unprecedented amounts of oil being stored in tankers, preventing an oversupply on the global market.

“The oil remains on the ships and therefore cannot enter the market,” explained Torbjörn Törnqvist, CEO of Swiss commodities trader Gunvor Group. Global oil prices fell in October for the third month in a row, while OPEC countries are increasing their production in the long term.

Mercuria CEO Marco Dunand expects an oil surplus of two million barrels per day in the coming year.

However, sanctions remain an uncertain factor that could reduce this surplus and thus keep prices for oil, gasoline, and diesel high.

Oil stocks transported by ship are currently at an all-time high, while global reserves remain low and market surplus is building up slowly.

The European Union, the United Kingdom, and the United States have imposed comprehensive sanctions on Russia in connection with the war in Ukraine. The US has also recently imposed an embargo on Rosneft and Lukoil, Russia's two largest oil producers.

(reuters, sie)