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Oil market 'comfortable' at current prices, says Vitol CEO

Published 02/27/2024, 11:15 AM
Updated 02/27/2024, 11:51 AM
© Reuters. FILE PHOTO: CEO of Vitol, Russell Hardy speaks during the Energy Asia conference in Kuala Lumpur, Malaysia June 26, 2023. REUTERS/Hasnoor Hussain/File Photo

By Ron Bousso and Deep Kaushik Vakil

LONDON (Reuters) -Global crude oil markets are expected to be fairly stable this year at around $80 a barrel, Russel Hardy, CEO of oil and gas trader Vitol, said on Tuesday.

Speaking at the Energy Institute conference, Hardy also said global oil demand is expected to peak in the early 2030s.

The crude oil market is "fairly comfortable" at current prices of around $80 a barrel, he added.

"The crude market is much less fragile than a couple of years ago," when prices rallied following Russia's invasion of Ukraine, he said, adding that Western sanctions "have been absorbed" in the market.

Overall fossil fuel demand is also set to plateau, later than previously expected due to a slower pace of the energy transition, he added.

"Oil demand has a good few number of years still to climb ... before it plateaus," Hardy said.

Refined oil product markets are more complex than crude markets as sanctions on Russia forced European buyers to source more diesel and jet fuel from further afield in Asia and the Middle East, he added.

The shift to low-carbon energy will impact developed economies of the Organisation for Economic Co-operation and Development (OECD) more than developing nations initially, he said.

© Reuters. FILE PHOTO: CEO of Vitol, Russell Hardy speaks during the Energy Asia conference in Kuala Lumpur, Malaysia June 26, 2023. REUTERS/Hasnoor Hussain/File Photo

The sales of electric vehicles in developed economies has knocked 500,000 barrels per day off oil demand, or roughly half a percent of global consumption, he said.

Shifting to the natural gas market, Hardy said that European households reduced their energy consumption by 10% to 12% this winter compared to pre-Ukraine war levels.

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