International oil prices are severely undervalued.

Amrita Sen, founder and Head of Market Intelligence at energy research and consulting firm Energy Aspects, told media in an interview on Friday that crude oil futures prices are seriously disconnected from the realities on the ground in the Middle East—physical crude oil prices should be approaching $150 per barrel. Sen pointed out that market reactions have been surprisingly muted despite intense hostilities across the Middle East. Currently, the Houthi movement—aligned with Iran—is attacking Saudi energy infrastructure and other critical facilities. "Futures prices struggle to reflect fundamental realities, partly because everything driving the market right now is tied to the U.S. midterm elections—and the U.S. government is expected to intervene somehow to lower oil prices," Sen said. She added: "Regardless of conditions on the ground, markets appear to be turning a blind eye." "What baffles me is the market’s apparent indifference to actual developments on the ground—the physical damage to infrastructure and disruptions to shipping," Sen noted, adding that this crisis has evolved into an unprecedented shipping crisis. Oil Crisis Escalates into a Shipping Crisis The oil crisis has now spilled over into the shipping sector. A large number of tankers are conducting ship-to-ship transfers outside the Strait of Hormuz, pushing global freight rates to record highs and reducing vessel availability on other routes. Russell Hardy, CEO of Vitol—the world’s largest independent oil trader—said at a forum in London this week that shuttle transfers through the Strait of Hormuz are "highly inefficient."

"Crude oil trading giant" Vitol suffered severe losses amid the Iran war; a prominent Chinese-origin derivatives trader incurred massive losses on heavily leveraged positions.

Yet as war broke out and Iran blockaded the Strait of Hormuz, price movements moved sharply against these bets: in the first week of the conflict, Singapore jet fuel prices surged over 70%, while Dubai crude soared due to the strait’s closure—leaving several of Vitol’s positions exposed and underwater. Moreover, derivative contracts Vitol had previously sold to hedge price risks on Middle Eastern cargoes turned into short crude oil positions amid the sharp price surge—amplifying overall losses. However, according to insiders, Liu’s team has since partially recouped earlier losses. As markets gradually absorbed extreme price spreads, the team adjusted its positions and recovered some of the losses. Yaoyao Liu is widely known in trading circles for his bold, high-stakes approach. A graduate of Cambridge University’s Chemical Engineering program, he has published academic papers on quantum chemistry. Born in China, he previously worked at Goldman Sachs before joining Vitol in 2012. According to insiders, multiple Wall Street commodity hedge funds have attempted to recruit him—but Liu has remained at Vitol. In 2022, he generated approximately $2 billion in trading profits for Vitol. Executives at rival firms even studied his trading patterns closely. He oversees analyst and trader teams in Dubai, London, and Houston; his operation functions internally like a dedicated hedge fund. To prevent competitors—and even internal colleagues—from gaining insight into his positions, Liu’s holdings are treated as highly confidential within the company. War’s Impact Spreads Broadly—Physical Operations Also Under Pressure Beyond derivatives losses, the Iran war has also significantly strained Vitol’s physical operations. According to The Wall Street Journal, weeks after the U.S.-Israeli strikes on Iran, two fuel tankers chartered by Vitol were attacked in the Persian Gulf, resulting in the death of one crew member. The blockade of the Strait of Hormuz prevented Vitol from exporting purchased crude oil and liquefied natural gas from the Persian Gulf, forcing the company to urgently source alternative supplies to fulfill delivery obligations. Meanwhile, the same derivative contracts Vitol had sold earlier to hedge Middle Eastern cargo price risks transformed into short crude oil positions amid surging oil prices—further exacerbating losses. Vitol has briefed banks on some of its difficulties—including massive insurance and freight bills arising from vessels stranded in the Persian Gulf at the end of March—but has not disclosed detailed figures. Some staff members have also departed from Vitol’s regional headquarters in Bahrain.

Ship-Fuel Squeeze Persists Despite More Hormuz Crude, Vitol Says

Oct 15, 2026

Vitol warns that increased crude flows through the Strait of Hormuz are not boosting high-sulfur fuel oil production due to strong refining margins. Supply disruptions from Middle East conflicts have driven HSFO bunker fuel prices to seven-month highs.

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