The global oil market systematically underestimates the magnitude of the current oil supply crisis, warned Tom Baker, CEO of Vitol Bahrain, during an international conference held in London on June 2, 2026. His diagnosis, reported by Reuters, indicates that current Brent prices do not reflect the depth of the imbalance between the physical supply of molecules and the installed capacity to process and distribute them to end markets.
Oil Supply Crisis: Beyond the Price per Barrel
Baker quantified the problem with concrete data: nearly 14 million barrels per day (bpd) of supply from the Middle East were left out of the market during the period of highest tension in the Strait of Hormuz. That figure is equivalent to approximately 14% of global crude demand in a single geopolitical episode. Simultaneously, global demand suffered a loss of between four and five million bpd, concentrated mainly in Asia and Africa—markets whose supply substitution capacity is more limited than that of advanced economies with access to emergency strategic reserves and greater supplier diversification.
Brent reached a trading peak of US$126 per barrel at the height of the crisis but retreated to approximately US$95/bbl in the following weeks. This drop was interpreted by part of the market as a sign of normalization in the supply-demand balance. Baker rejected this reading with operational arguments: the price reduction does not indicate that the physical supply problem has been resolved, but rather that visible demand contracted due to a lack of real access to available molecules, creating an illusion of equilibrium that can abruptly reverse when buyers need to restock simultaneously.
Vitol: Oil Supply Crisis in Refined Products, Not Just Crude
The Vitol analysis emphasized that the most serious oil supply crisis is not that of crude oil itself, but that of refined products. When a refinery cannot obtain the specific type of crude for which it was designed, its substitution flexibility is technically limited. Changing the input crude slate requires adjustments in process units, blend reformulations, and in some cases, equipment modifications that are not completed in days or weeks. The result is a gap between the refinery’s nameplate capacity and its actual production of products within specification.
According to Vitol, the true risk does not appear when the price rises; it appears when the buyer enters the market and discovers that there are no physical barrels available in the required specification, at the price they can pay, and in the time they need. This description applies especially to marine diesel, jet fuel, and low-sulfur fuel oil—categories where technical substitution between supply sources is complex and where regional inventories have taken months to rebuild following previous disruptions.
Oil Supply Crisis: Implications for Operators and Refiners
For process engineers, asset managers, and supply chain planners, Vitol’s analysis has direct operational implications. A market that appears price-stabilized may be hiding a buildup of tension in physical inventories that is released abruptly during the next disruptive event. The implicit recommendation is to maintain safety margins in intermediate and finished product inventories above operational minimums, especially in markets with high exposure to routes passing through the Strait of Hormuz or the Red Sea.
According to Reuters, Baker noted that the warning signs the market ignores today are precisely those that generate the price and supply crises of the following year. This context connects directly with the IEA’s warning about the global energy crisis and the long-term agreements that operators like Vitol are extending in LNG to ensure physical access to molecules regardless of spot market volatility.
