Vitol Warns Oil Market Is Underpricing Supply Risks
Tom Baker of Vitol Bahrain states that the oil market is underpricing risks as 14 million barrels per day remain offline due to the Middle East conflict. While prices have receded to 95 dollars, he warns that inventory draws cannot continue indefinitely and prices must rise when demand returns.
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Vitol managing director Tom Baker warned midday Tuesday that markets are underpricing risks after Iran took 14 million barrels per day offline. The effective closure of the Strait of Hormuz triggered the largest oil supply crisis in history, pushing prices up 30% since February 28. Baker, speaking at the S&P Global Energy Middle East Petroleum and Gas Conference in London, noted that global inventories cannot indefinitely cover the deficit.
