Russell Hardy, the chief executive of Vitol - described as the world’s largest oil trader - told attendees at the FT Global Commodities Summit on Tuesday that the ongoing U.S.-Iran conflict has removed substantial volumes from the global oil system.
Hardy said that between 600 and 700 million barrels of oil supply have already been lost as a direct result of the conflict. He added that, by the time market conditions normalize and recovery occurs, the cumulative loss of supply is expected to reach at least 1 billion barrels.
In quantifying the acute impact on flows, Hardy reported a reduction of 12 million barrels per day of hydrocarbons attributable to the supply disruption created by the war. He also pointed to an effect on consumption dynamics, saying that 4 million barrels per day of oil demand have been lost as a consequence of those same supply interruptions.
Hardy further noted that fuel inventories will be deployed to help bridge the disruption. He estimated that between 300 and 400 million barrels of stored fuel will be consumed because of the conflict.
The figures presented at the summit outline both the scale of immediate physical disruptions to supply and the draw on stored product intended to support markets during the conflict. They capture losses measured both in cumulative barrel volumes and in daily flow terms across supply and demand.
While the numbers reflect the situation as described by Hardy, they are framed around two stages: the present losses already tallied and the additional consumption of inventories before the market is considered to have recovered. The chief executive’s remarks separated the shock to flows - 12 million barrels per day of hydrocarbons lost - from the demand-side consequence he identified - 4 million barrels per day of oil demand foregone.
These data points provide clear metrics on the war’s immediate footprint on physical crude and fuel availability, and on the scale of inventory drawdown required to manage the shortfall until recovery is achieved.