Gunvor Group boss Torbjorn Tornqvist is not worried about the impact of the widening Middle East crisis on crude supply.
The trader and charterer’s chairman and founder told a conference in Fujairah, United Arab Emirates, that he is confident oil will still flow despite Israel extending its campaign against its enemies in Lebanon and Yemen.
Bloomberg cited Tornqvist as saying that it appears the market is “more focused on concerns about the lack of growth in oil demand”.
Shipments of crude from big producers like Saudi Arabia have not been significantly affected over the past year.
Attacks on shipping by Yemen’s Houthi militia have merely caused delays as some tankers reroute around South Africa.
One sign of unconcern in the market is the oil price falling.
Brent crude dropped as much as 2.6% in London on Tuesday, even as Israeli ground troops went into Lebanon to target Hezbollah.
Oil is trading at close to $71 a barrel. Consumption, especially in China, is said to be weak.
And Libyan supplies could return to the market in two weeks, as rival government factions agreed a deal over the leadership of the country’s central bank.
A dispute over the control of oil revenues has led to a shutdown of eastern production and exports since the start of September.
VLCC rates under pressure again
Shipbroker BRS said that VLCCs have failed to maintain last week’s rate rally, with charterers preferring to work their cargoes quietly
This has meant an apparent lack of activity with tonnage lists being replenished after weather delays had tightened things up, the company added.
BRS has noted “cracks in sentiment” are appearing among owners.
The Baltic Exchange assessed VLCC rates at $31,200 per day from the Middle East to Asia on Monday, down 19% over the last week.
