Vitol's chief executive, Ian Taylor, said he expected the shift to electric vehicles and non-fossil fuel sources of energy to shrink the oil industry. Speaking at an event in London, the executive said crude oil demand could peak some time around 2028-2030.
Vitol is responsible for the trade of around 7 percent of global oil, which makes it the biggest oil trading firm in the world. Taylor admitted he is concerned about the company's place in a new, less oil-dependent, world. An additional cause for worry is the shrinking pool of talent, as more young people opt for a career in technology, he said.
A third cause for worry for one of the world's top oil traders is the low price of the commodity, although Taylor said that he expected prices to improve to about US$60-65 in the next two to three years. Before that, however, Taylor said, growing U.S. oil exports would continue to pressure international benchmarks in 2018.
The Vitol chief said the international oil price benchmark, Brent, could do with a liquidity boost and he praised plans to add in 2018 a fifth North Sea grade from Norway's Troll field to the four-grade BFOE basket that makes up the benchmark.
However, Taylor noted, more grades need to join Brent, Forties, Oseberg, Ekofisk, and Troll in order to further improve liquidity. Yet, he said, adding Russia's Urals blend would not help liquidity because it is loaded from several terminals and the loading programs are inconsistent.
One of the biggest traders of Kurdish oil, Vitol could suffer adverse consequences should Kurdistan attain independence. Indeed, Taylor said he hoped the autonomous region would not split from Iraq – a prospect that is currently distant, as Baghdad takes aggressive measures to cut off Kurdistan's links to the bigger world after the autonomous region voted for independence in its recent referendum.
By Irina Slav for Oilprice.com