Gary Pedersen, head of the trading firm Gunvor, has warned that the oil market faces increased volatility as Middle East tensions coincide with a seasonal slowdown in crude demand. This convergence heightens the risk of further sharp and unpredictable swings in oil prices.

After taking over the world's fourth-largest independent oil trader through a management buyout last December, Pedersen indicated that the period from April to June could see heightened market turbulence. This quarter typically experiences a lull in crude demand, situated between winter heating needs and the summer driving season.

"This is a relatively more challenging period with weaker demand, and we need to be extra cautious. Frankly, the market could experience stormy conditions," he stated in an interview. During such times, price movements may be driven more by news headlines than by underlying supply and demand fundamentals.

The International Energy Agency forecasts that global crude demand will fall by 1.5 million barrels per day in the second quarter, which would mark the largest decline since the COVID-19 pandemic. In contrast, OPEC predicts a more moderate daily drop of 500,000 barrels.

Gunvor reported last week that it generated over $1.6 billion in gross profit during the first three months of this year, a figure already on par with its full-year results for 2025.

Pedersen noted that the company has applied lessons learned from recent crises in navigating conflicts involving Iran. In past crises, the firm was caught off guard by surging oil prices and forced to close trading positions, revealing weaknesses in its risk management.

"We fully leveraged the extensive experience our team gained in 2022," he said, referring to the period following the spike in natural gas prices triggered by the Russia-Ukraine conflict.

Prior to the outbreak of conflict, Gunvor reassessed all its positions and exposures and continued trading throughout the turmoil, including purchasing significant volumes of crude from the release of the U.S. Strategic Petroleum Reserve. "We faced no liquidity constraints. We were able to trade freely, maintain ample liquidity, and focus on capturing all arbitrage opportunities," Pedersen explained.

A key part of this strategy involves concentrating on the physical flow of oil rather than oil derivatives. Pedersen emphasized his desire for traders to minimize what he termed "stress risk"—the danger of being forced into passive positions due to extreme and unpredictable price swings. "Stress can lead to total losses, so we ensure we continuously measure stress risk every day," he added.

Despite frequent large sell-offs in crude futures, which Pedersen partly attributes to what he called "masterful messaging" from U.S. President Donald Trump, he noted that physical crude supply remains tight. This is because buyers are scrambling to find alternatives to offset disrupted supplies from the Gulf region.

Gunvor is gradually emerging from a turbulent period during which it faced tensions with Washington. The U.S. government previously described the company as a "Kremlin puppet" and blocked its acquisition of overseas assets from Russia's Lukoil.

The United States is now a primary focus for the company, where it holds over $4 billion in assets, accounting for approximately one-third of Gunvor's trading volume. "We are focused on how to expand our footprint in the U.S. We remain very bullish on U.S. natural gas and crude operations," Pedersen said.

He also expressed interest in acquiring refining assets, noting that years of capacity reduction in Western markets have created opportunities. "As demand grows, the outlook for refining looks very promising," he commented.

Pedersen is working to integrate his experience from the hedge fund Millennium, reshaping Gunvor into a more data-driven trading institution. "My background is more oriented toward data analysis," he said. "I like to quantify things as much as possible."

His top priority, Pedersen stated, is ensuring Gunvor delivers consistent performance across various market cycles. "We aim to generate sustainable profits regardless of market conditions," he concluded.