According to Vitol's Tom Baker, why is the oil market underpricing risks, and what specific supply disruption has occurred?

The oil market is underpricing risks from the Iran war, particularly due to Iran's effective closure of the Strait of Hormuz and attacks on energy infrastructure like oilfields and refineries, which have taken about 14 million barrels of Middle East supply offline — described as the largest oil supply crisis in history.

What does Tom Baker identify as the potential turning point for oil prices, and what mechanism does he say would ultimately resolve price spikes?

Baker identifies the turning point as 'when someone really needs those physical molecules and the physical molecules just aren't there to buy'; he states that the only solution to higher prices at that point would be demand destruction — a process where soaring prices force consumers to curb purchases until demand recalibrates to supply.

Oil market could be underpricing risks, Vitol's Bahrain chief says

Jun 2, 2026

Vitol's Bahrain chief warns the oil market underprices Iran war risks, noting 14 million barrels offline. He predicts prices could rise sharply if supply shortages persist once inventory drawdowns stop.

reuters

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