Oil Prices Could Hit $200 per Barrel Due to Reserves and Tanker Shortages

Russell Hardy, CEO of Vitol Group, the world's largest independent oil trading company, has warned of a potential surge in oil prices to $200 per barrel. He attributed this risk to depleted oil reserves in Western countries and looming logistics challenges, particularly a shortage of tankers. Hardy made these remarks at the Energy Intelligence Forum in London, highlighting that the West has nearly exhausted its reserves due to the ongoing war with Iran.

Hardy's concerns were echoed by Saudi Aramco CEO Amin Nasser, who noted that global oil reserves have shrunk from about 10 billion barrels before the war to less than 6 billion barrels today. Only 10% of the remaining reserves are readily accessible due to technical limitations. The International Energy Agency (IEA) reported a reduction of 507 million barrels in global commercial reserves since the start of the war, with the rate of depletion accelerating in August.

The IEA emphasized the critical role of reserves in maintaining market balance, especially amid the depletion and full utilization of existing refining capacities. Recent efforts by developed countries, including a G7 decision to release 100 million barrels of diesel fuel and crude oil, were deemed insufficiently transparent by Hardy. Nasser warned that until the Strait of Hormuz is fully open and supply stability is restored, transportation issues will persist, further straining the market.

Hardy described the current crisis as a multi-stage problem, starting with a crude oil shortage, escalating to a deficit of petroleum products, and now facing transportation bottlenecks. The complex export schemes from the Persian Gulf, involving reloading in the Gulf of Oman, have led to inefficiencies and skyrocketing freight prices. These factors collectively threaten to push oil prices to unprecedented levels.