The Swiss oil company Gunvor Group has stated that a significant amount of oil remains stranded on tankers with no way to reach the market due to Western sanctions imposed against Russia and Iran. Since 2022, the European Union, United Kingdom, and United States have implemented numerous measures against Russia due to the ongoing war with Ukraine. Among the sanctions imposed by the US last month are measures targeting Russia’s two largest oil companies, aimed at preventing Russia from selling oil in international markets. Oil trade represents a major source of revenue for Russia.
Torbjörn Törnqvist, CEO of Gunvor Group, said that because global oil production exceeds demand, the negative impacts from oil selling restrictions are relatively minimal. This explains why oil prices haven’t changed significantly, he noted. However, he added that Western sanctions have resulted in an unexpectedly large amount of oil failing to reach intended recipients. This oil remains on tankers traveling at sea until new distribution channels can be established. Törnqvist also stated that if sanctions were lifted, the market would experience a substantial oversupply of oil.
In October, oil prices decreased for the third consecutive month, primarily due to production exceeding demand.
