CEO Vitor warns: The war continues to drag on, and refined oil products send a strong signal that supply is getting tighter
The Zhitong Finance App learned that Vitor Group CEO Russell Hardy said at the Asia-Pacific Petroleum Conference hosted by S&P Global Energy in Singapore that the refined oil market is sending a strong signal of tightening supply, while the outlook for crude oil is relatively stable, and tanker traffic in the Strait of Hormuz has rebounded. According to its estimates, the total amount of oil transported in the strait is currently about 10 million barrels per day, of which crude oil accounts for 9 million barrels, and the rest is refined oil products. However, Hardy admits that there is uncertainty about this data, and it is difficult to quantify the actual numbers accurately.
Speaking about the fuel market on Tuesday, Hardy said, “Currently, supply and demand in the market are extremely tight, and there is almost no room for flexibility.” He added that global stocks of refined oil products have basically fallen to the bottom level.
Since 2026, the global oil market has been successively impacted by the US-Iran war and the ongoing escalation of the Russian-Ukrainian conflict, and Ukraine has launched multiple rounds of drone attacks on Russian refineries. Although crude oil futures have risen by about 60% during the year, the refined oil market has risen even more sharply, in part because Russia has imposed a ban on diesel exports.
On the US side, most refineries are operating at full capacity, but the country's distillate (including diesel) stocks have fallen to their lowest level in at least 25 years. Meanwhile, the average retail price of diesel also climbed to a record high.
Hardy said at the conference that global stocks of refined oil products “are still continuing to be eliminated” and that “our current refining capacity is still insufficient to stop stocks from falling, and the world's surplus buffer stocks are being continuously consumed.”
In the Middle East market, traders are closely watching the physical traffic volume in the Strait of Hormuz, despite ongoing disputes over the sovereignty of the waterway between the US and Iran, and frequent attacks on ships. Macquarie Group revealed on Monday that currently about 7 million barrels of crude oil and refined oil products pass through this main throat channel every day, compared to the pre-war level of about 20 million barrels.
Hardy said Vitor's estimated 10 million b/d strait flow “does not guarantee smooth shipping every day” and “this depends on the ship, insurance, and whether the captain and crew are willing to take on this difficult task.” He said that although this flow “may be sufficient to maintain existing refining operations,” the Middle East and Russia each lost about 2 million b/d of refined oil exports, making the fuel market crisis far more serious than the crude oil side.
Mark Senn, senior vice president of global transactions at Phillips 66 of the United States, said at the conference: “Until this supply shock hit, there was little room for buffer in the refining system.” He said that the US refining system is fully operating at full capacity.
On the Chinese demand side, Vitor Hardy predicts that with the arrival of the peak demand season at the end of the year (increased fuel use in winter), China's crude oil demand is expected to pick up somewhat. China accumulated high strategic and commercial stocks of crude oil before the outbreak of the US-Iran war, which reduced its imports by 5 million to 6 million b/d this year compared to the same period last year — a decline that Hardy believes is “unsustainable.” According to data released on Tuesday, China's crude oil imports rebounded in August compared to July due to a slight increase in shipments from the Persian Gulf and increased procurement efforts by refineries from other sources, but total imports were still nearly a quarter lower than in the same period last year.