By Stuart Turley, Energy News Beat
In a landscape where energy markets are increasingly shaped by geopolitical maneuvering, Vitol CEO Russell Hardy has sounded a note of caution—and opportunity—for the global oil trade. Speaking at the International Energy Week conference in London, Hardy highlighted how U.S. pressure on sanctioned oil flows from Russia and Iran is constricting supply outlets, leading to a tighter market than previously anticipated. Despite earlier forecasts of an oil glut in 2026, the reality on the ground tells a different story: millions of barrels of sanctioned crude are piling up in floating storage, boosting demand for compliant supplies and potentially driving prices higher.
This shift comes amid intensified U.S. enforcement against the so-called “dark fleet”—a shadowy network of aging tankers evading sanctions to transport Russian, Iranian, and Venezuelan oil. As India bows to pressure from the Trump administration and halts its purchases of Russian crude, China remains the primary lifeline for these sanctioned producers. But with unsold barrels lingering at sea and alternative supplies abundant, the black market for this oil is cracking under the strain. Let’s dive into the details and explore the broader implications for oil prices and OPEC’s influence.
The Geopolitical Squeeze: Insights from Vitol’s HardyHardy’s remarks, as shared in a widely circulated X post by commodities analyst Tracy Shuchart (@chigrl), underscore a market in flux. “The global oil market is getting tighter despite earlier predictions of a glut, as U.S. pressure limits outlets for Russian and Iranian oil, boosting demand for oil from other sources,” Hardy stated. Russia and Iran, two heavyweight exporters under heavy sanctions, have grown increasingly dependent on China as traditional buyers retreat. India, once a key importer of discounted Russian barrels, has agreed to cease purchases amid U.S. diplomatic arm-twisting under President Trump.
👇👇👇👇👇👇👇👇👇👇👇👇👇
Oil market tightens as geopolitics squeezes supply, Vitol CEO says
The global oil market is getting tighter despite earlier predictions of a glut, as U.S. pressure limits outlets for Russian and Iranian oil, boosting demand for oil from other sources,…
— Tracy Shuchart (𝒞𝒽𝒾 ) (@chigrl) February 12, 2026
This echoes the analysis in Javier Blas’s recent Bloomberg opinion piece, which paints a grim picture for the illicit trade in Russian and Iranian crude. The black market, boasting a staggering $1 billion in daily turnover, is faltering not just from sanctions and political pressure but from an influx of legitimate oil alternatives at competitive prices.
Buyers are finding it easier—and less risky—to comply, leaving sanctioned oil stranded.
The Dark Fleet’s Growing Burden: Oil Afloat and Unsold
A key indicator of this tightening is the sheer volume of oil trapped in transit aboard dark fleet tankers. As of February 10, 2026, approximately 143 million barrels of Russian crude were idling at sea, effectively transforming these vessels into floating storage units.
This represents about half a month’s worth of Russia’s production, which hovered around 9.28 million barrels per day in January.
Excluding certain blends like CPC, the figure stands at around 130 million barrels in transit and storage as of early February.
Floating storage alone has surged, with Russian crude volumes rising by 13.3 million barrels—nearly fivefold—since December.
Iranian oil faces similar woes. In Malaysian waters near Johor, up to 60 dark fleet tankers laden with Iranian crude were spotted loitering mid-January, awaiting ship-to-ship transfers en route to China.
The dark fleet, now estimated at up to 1,400 vessels, is expanding as sanctions bite, but it’s also becoming a liability—aging ships without proper insurance, often sailing under false flags, and increasingly targeted by enforcers.
Vitol CEO on the oil black market:
There is “an enormous amount” of sanctioned oil sitting on the water: ~40m barrels of Russian oil added to the shipping fleet in last 60 days and “is just sitting there waiting to find a home”
As we in @Opinion wrote: https://t.co/lZ94rzy7A7
— Javier Blas (@JavierBlas) February 12, 2026
China’s Role: The Last Major Buyer Standing
China’s position as the dominant customer for both Russian and Iranian oil amplifies the geopolitical risks. In 2025, China snapped up over 80% of Iran’s exported crude, averaging 1.38 million barrels per day—about 13.4% of its total seaborne imports.
For Russia, January 2026 marked a record: 1.86 million barrels per day in seaborne exports to China, a 46% jump year-over-year, surpassing even Saudi Arabia as Beijing’s top supplier.
Overall, China has absorbed around 55% of global seaborne sanctioned oil since 2023, with independent “teapot” refiners in Shandong province leading the charge for discounted barrels.
Yet, this reliance cuts both ways. As U.S. tariffs and sanctions threaten to disrupt these flows—Trump has floated 25% tariffs on Iran’s trading partners—China’s access to cheap oil could falter.
Iranian shipments to China have already dipped below 1.3 million barrels per day in recent months, crowded out by even cheaper Russian alternatives.
If tensions escalate, Beijing’s energy security could be tested, forcing a pivot to pricier Middle Eastern or U.S. supplies.
Price Impacts: Higher Costs Ahead, with OPEC Gaining Leverage
The fallout from this squeeze is already rippling through prices. Brent crude is teasing $70 per barrel, buoyed by India’s reduced Russian imports—from 1.2 million barrels per day in January to a projected 800,000 by March.
U.S. enforcement, including high-seas seizures of dark fleet tankers, is exacerbating the issue. The Trump administration’s aggressive tactics—seizing vessels like the M/T Skipper and Marinera—signal a new era of direct intervention, blurring economic sanctions with naval action.
By sidelining illicit supplies, these moves are inadvertently driving up prices for non-sanctioned oil. Tanker rates have surged, with Aframax vessels hitting multi-year highs in January 2026 as ships shift away from shadow operations.
Analysts at Goldman Sachs model that a 400,000 barrel-per-day swing in Venezuelan production could shift Brent by $2 per barrel.
Broader dark fleet disruptions could add $5-7 to global benchmarks if fully enforced.In a roundabout way, this bolsters OPEC and OPEC+. By removing discounted sanctioned barrels from the market, demand shifts to compliant producers like Saudi Arabia and the UAE, enhancing the cartel’s pricing power.
OPEC can unwind voluntary cuts without oversupplying, maintaining discipline among members. As unsold Russian and Iranian oil accumulates, OPEC gains leverage to stabilize prices at levels that support their budgets—potentially $85 or higher—while the U.S. insulates itself through domestic production and Venezuelan control.
Looking Ahead: A Tighter Market in Uncertain Times
As Hardy aptly put it, geopolitical pressures are reshaping the oil landscape, turning a predicted surplus into a tightening squeeze. With 140 million-plus barrels adrift and China shouldering the bulk of sanctioned flows, the stage is set for volatility. U.S. enforcement may elevate prices in the short term, but it also hands OPEC greater control, potentially leading to a more disciplined cartel.
For energy stakeholders, the message is clear: adaptability is key. As host of the Energy News Beat Podcast, I’ll be diving deeper into these dynamics in upcoming episodes—stay tuned for expert insights on how this unfolds. In the meantime, keep an eye on Brent; the squeeze is just beginning.
Sources: bloomberg.com, X, @chigrl, energynewsbeat.co
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