Russell Hardy, chief executive of Vitol, warned at the Energy Intelligence Forum in London on 6 October 2026 that a shortage of tankers could drive crude prices to $200 a barrel. Vitol is the world’s largest independent oil trader.
His warning turns on a problem of transport rather than a simple absence of oil. More crude is coming from the Gulf, Hardy said, while buyers are finding hardly any ships available to take it on. The resulting shortage is turning the supply crisis into an acute transport crisis.
Hardy said a disruption to continuous ship traffic through the Strait of Hormuz could produce a price of up to $200 per barrel.
The squeeze followed a sequence of disruptions that began in late February 2026, when a US-Iran war triggered a crude oil crisis. That crisis then spread into refined products, according to Hardy.
The US Navy later secured the shipping route through the Strait of Hormuz, allowing ship-to-ship transfers to begin. Around 12 million barrels of crude oil and 2 million barrels of refined products have since been exported from the Gulf each day through those operations.
Yet the route depends on tankers waiting in the strait for transfers that take 24 to 40 hours each. Hardy said the arrangement was highly inefficient and vulnerable because it relied on a group of tankers, with vessels sometimes waiting days or weeks for a transfer.
Buyers are therefore unable to secure tankers even when crude is available, Hardy said, creating a fresh bottleneck.
Freight is compounding the pressure. Gulf of Oman earnings for Very Large Crude Carriers, or VLCCs, are up about 250 percent month to date, while rates on West Africa-China and US Gulf-China routes have more than doubled.
A VLCC carries roughly two million barrels and is three football fields long. Brokers estimate that around 15 percent of the global VLCC fleet is already occupied by Hormuz shuttle work.
The Baltic Oman-China index was near $871,000 a day. Rising charter rates are burdening refineries and making the cost of landing crude increasingly difficult to calculate.
“No one knows whether charter rates will be closer to $2, $3 or $4 a barrel, so everyone is under considerable pressure,” Hardy said.
Bloomberg reported on 19 September 2026 that high freight costs had already made some long-distance crude trades uneconomic, with barely any VLCCs available to hire in parts of the market.
North Sea crude sold for $145 a barrel last week, according to an oil industry executive. European refiners’ margins have recently turned negative as shipping costs and input prices rise.
Hardy also warned that the West had no more inventories to draw down.
Last week, the G7 agreed to a coordinated release of 100 million barrels of crude and diesel from strategic reserves through the International Energy Agency.
The immediate question is whether the ship-to-ship system can keep the Gulf flow moving. Hardy’s $200-a-barrel scenario rests on a blockage of 10 to 14 million barrels a day from the Gulf, while charter rates and refining margins remain volatile.
Comments (0)