Torbjörn Törnqvist, CEO of Gunvor Group (an energy commodities trading company), announced that Western sanctions against the Iranian and Russian regimes have led to an unprecedented volume of oil being stored on ships.
Reuters reported on Wednesday, November 5, from the ADIPEC Energy Conference in Abu Dhabi, quoting Törnqvist as saying:
“This is unprecedented, the size of that. Therefore, obviously, if all sanctions would disappear, this market would clearly be quite oversupplied.”
According to him, sanctions have led to the storage of a massive amount of oil, part of which is being kept in tankers.
After Years of Concealment, Iranian Oil Tankers Have Reappeared on the Global Positioning System
On November 4, the maritime security company Dryad Global reported that Tehran exports between 1.5 and 2 million barrels of oil per day, generating around $54 billion annually, with 80% to 90% of it going to Beijing.
The Islamic Revolutionary Guard Corps (IRGC) and the General Staff of the Iranian regime’s Armed Forces, through their commercial networks in China—including oil brokers—are reportedly negotiating to obtain Chinese weapons such as missiles, drones, and air defense systems.
According to Dryad Global, Iranian crude oil is labeled as “Malaysian” and transferred ship-to-ship to Chinese refineries, particularly in Shandong province.
In addition to the Iranian regime, Russia has also been sanctioned by the European Union, the United Kingdom, and the United States over the war in Ukraine.
Global oil prices declined in October for the third consecutive month.
As the Organization of the Petroleum Exporting Countries (OPEC) and its allies increase production and non-OPEC countries also expand output, concerns over an oil surplus have grown.
Marco Dunand, CEO and co-founder of Mercuria (another major energy trading company), said at the Abu Dhabi conference that Western sanctions remain a destabilizing factor in oil supply.
He added that the world may move from an oversupply of 2 million barrels per day to 1 million barrels per day.
Dunand emphasized: “Despite low global oil inventories, there is a lot of oil at sea. Therefore, oversupply is slowly building up and will likely reach the market in the coming months.”
