Vitol cites major oil market arbitrage opportunities due to war with Iran — The National

In Fujairah, United Arab Emirates, trading group Vitol said that disruptions to trade routes caused by the war with Iran have created significant arbitrage opportunities in the global oil market. As The National reports, Tom Baker, Vitol’s managing director in Bahrain, said this during an industry forum.

Tankers operating at the limit of their capacity

According to Baker, oil has to be transported over longer distances because of route changes, increasing pressure on the tanker fleet. He noted that with the fleet operating at 100% capacity, maritime transportation becomes a particularly attractive line of business.

Tanker freight rates have risen due to restrictions in the Strait of Hormuz and the Bab el-Mandeb Strait, forcing vessels to take longer routes and carry out ship-to-ship cargo transfers more frequently. According to Clarksons Research, at the end of September, average spot earnings for very large crude carriers worldwide were approaching $642,000 per day.

Baker also said that under these conditions, oil from Vitol’s western or European refineries began reaching eastern markets.

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Refining recovery and supplies to Africa

The Vitol representative said that Middle Eastern refining capacity is recovering quickly after war-related shutdowns. At the same time, he said that about 2 million barrels per day of refining capacity has been taken offline in Russia, while refining volumes have also declined in China.

Last month, S&P Global Energy forecast that average refining throughput in the Middle East this year would amount to about 8 million barrels per day, 1.6 million barrels per day less than in 2025. Plant shutdowns have tightened supplies of gasoline, diesel and jet fuel.

Vitol also sees the Middle East and East Africa as increasingly closely connected energy markets. During the crisis, the company helped Uganda diversify fuel imports beyond Kenya’s pipeline system by routing supplies through the Tanzanian port of Tanga.

According to Baker’s estimate, Uganda may begin exporting about 230,000 barrels of oil per day next year through a heated export pipeline to Tanga. He believes this volume could be purchased by buyers in Europe, the Middle East or Asia.