Vitol CEO flags supply uncertainties as he predicts oil prices of $70-$80/bbl by 2025

Russell Hardy, the CEO of Vitol - the world's biggest independent oil trader - said that global oil prices will remain in the $70 - $80 range per barrel in 2025. Geopolitical risk creates uncertainty about supply.

The world oil price has been capped due to concerns over a reversal of OPEC+'s supply cuts by 2025, and China’s slow oil demand growth despite the risks of disruption in Middle East supply.

He said that the market was driven by a concern over the balances of 2025.

He said that there are still many geopolitical tensions and unknowns in the Middle East. This includes the Iranian exports as well as Venezuelan exports.

He said: "I think it is a bit premature to conclude the market will be oversupplied by 2025."

China faces

If Donald Trump increases sanctions against Tehran upon his return to the U.S. presidency in January, it could put a strain on the supply of cheap Iranian crude. This crude accounts for 13% of all oil imports.

Janet Kong of Singapore's Hengli Petrochemical International said that there are currently 4 million barrels of spare capacity per day (bpd), reducing supply concerns.

She expects that the growth of fuel demand in China and India - the world's 2nd and 3rd oil consumers - will drive global oil prices in 2025. In 2025, the world's top two oil consumers will drive oil prices.

Kong, the head of Hengli Petrochemical's trading division, says that weak fuel demand and export restrictions have caused a decline in Chinese refinery utilization rates below 80%. This is "very low", by industry standards.

She said that the margins of Chinese refineries are unlikely to improve in the near future.

Hardy, from Vitol, said that China's oil consumption is expected to increase by 700,000. bpd by 2025.

He said that China's economic growth in 2025 will be normal compared to the last two years. Reporting by Florence Tan and Emily Chow; Additional reporting in Bangalore by Ashitha Shivprasad; Editing by Jamie Freed & Christian Schmollinger

(source: Reuters)