The head of Vitol Group highlighted on Tuesday that refined fuel markets are flashing powerful signs of tight supply, while the outlook for crude remains comparatively stable. Speaking at the S&P Global commodity conference in Singapore, CEO Russell Hardy pointed to a recovery in tanker transits through the Strait of Hormuz, although uncertainties persist around exact volumes.
Hardy estimated that current daily shipments through the strait total around 10 million barrels, comprising roughly 9 million barrels of crude and the remainder in refined products. However, he conceded that the figures carry a degree of uncertainty and are difficult to quantify with precision. Discussing the fuel complex, Hardy remarked that “the market is incredibly tight at the moment, with almost no slack,” adding that global refined product inventories have essentially bottomed out.
Since the start of 2026, global oil markets have been rattled by the ongoing US-Iran conflict and the escalating Russia-Ukraine war, with multiple drone strikes targeting Russian refineries. While crude futures have climbed roughly 60% year-to-date, the refined products segment has rallied even harder, partly due to Russia’s diesel export ban. In the United States, most refineries are running at full tilt, yet distillate inventories, including diesel, have sunk to their lowest levels for this time of year in at least 25 years. Meanwhile, the national average retail diesel price has surged to a record high.
Hardy noted that global refined product inventories “continue to draw down,” adding that “we don’t have enough refining capacity to prevent stock draws, and the world’s remaining buffer stocks are being consumed.” In the Middle East, traders are closely monitoring physical flow through the Strait of Hormuz amid sovereignty disputes and recurring vessel attacks. Macquarie Group disclosed on Monday that roughly 7 million barrels per day of crude and refined fuels currently transit the chokepoint, down from about 20 million barrels per day prior to the war. Hardy said Vitol’s estimate of 10 million barrels per day “isn’t a guarantee that it will flow every single day,” explaining that “it depends on the vessel, insurance, and whether the captain and crew are willing to take on the mission.”
He added that while the current flow “may be enough to keep existing refining capacity running,” the loss of roughly 2 million barrels per day in refined fuel exports from both the Middle East and Russia has made the fuel crisis far more severe than the crude side. Mark Sen, senior vice president of global trading at Phillips 66, told the conference that “the refining system had very little buffer before this supply shock.” He noted that the U.S. refining network is already operating at full capacity across the board.
On Chinese demand, Hardy projected a modest recovery in crude imports as the winter season approaches, typically a period of higher fuel consumption. China built up sizable strategic and commercial crude inventories before the outbreak of the US-Iran conflict, which has led to a year-on-year decline in imports of 5 million to 6 million barrels per day—a drop Hardy described as “unsustainable.” Data released on Tuesday showed that August crude imports rebounded slightly from July, aided by a small uptick in cargoes from the Persian Gulf and stepped-up purchases from other sources, though volumes still trailed year-ago levels by nearly a quarter.