Western sanctions on Russia and Iran are creating record volumes of oil kept in floating storage, preventing a supply glut from forming in global markets, Gunvor Group’s CEO said on Wednesday.
The European Union, United Kingdom and the United States have imposed a raft of sanctions against Russia over its war in Ukraine, with the latest U.S. embargo targeting Russia’s two top oil producers Rosneft and Lukoil last month.
“Through the sanctions that we’ve had around the world, an enormous amount of oil is stuck and dislocated,” Torbjorn Tornqvist, CEO of Swiss-based commodities trader Gunvor Group, told the ADIPEC energy conference in Abu Dhabi.
“This is unprecedented, the size of that. Therefore, obviously, if all sanctions would disappear, this market would clearly be quite oversupplied,” he added.
(Reporting by Yousef Saba; Editing by Muralikumar Anantharaman and Kim Coghill)