World's Largest Oil Trader Vitol Warns Gasoline Is the Next Fuel Under Supply Pressure

Oil trading giant Vitol has issued a warning that gasoline is becoming the next petroleum product at risk of a serious supply crunch, as the Iran war continues to disrupt global energy markets. The conflict, which began on February 28, 2026 with U.S. and Israeli strikes on Iran, has effectively shut down the Strait of Hormuz and removed roughly 14 million barrels per day of Middle Eastern supply from the market - the largest oil supply disruption in recorded history.

In the months following the outbreak of hostilities, diesel and jet fuel were the first products to feel severe pressure, as Middle Eastern refiners had historically been dominant suppliers in both markets before the conflict blocked exports through the strait. By early June 2026, however, Vitol's traders and analysts are pointing to a new front opening in the fuels crisis.

The core mechanism driving the gasoline risk is a structural conflict within the refining system. Refiners worldwide, and particularly along the U.S. Gulf Coast, have been reconfiguring their output to maximize production of diesel and jet fuel, where margins and shortages have been most acute. This shift inevitably squeezes gasoline output as a byproduct. U.S. Gulf Coast refineries, which are among the most price-responsive in the world, have ramped up jet fuel production to near-record levels to capture the price spike, while gasoline's share of total output has fallen well below seasonal norms.

The timing is problematic. This rebalancing toward jet fuel and diesel is happening just as the Northern Hemisphere enters the peak summer driving season, which historically generates the highest annual demand for gasoline. Inventories have already dropped below seasonal averages heading into this period, leaving limited buffer against further demand surges or unexpected supply disruptions.

Tom Baker, a board member at Vitol and managing director for Bahrain, stated at the S&P Global Middle East Petroleum and Gas Conference in London on June 2, 2026 that Western governments remain largely unprepared for the full scale of the crisis. He described the response in Europe and the United States as complacent, warning that the markets are underpricing the ongoing risks. Vitol estimates that global demand destruction has reached approximately 4 million barrels per day, as importers in Asia and parts of Africa delay or cancel purchases in anticipation of lower prices following a potential conflict resolution, a resolution that remains far from certain.

Oil prices initially surged to around $126 per barrel when the Strait of Hormuz was effectively closed. As of early June 2026, Brent crude has retreated to around $95 per barrel, partly reflecting demand destruction and the drawdown of strategic reserves by Western nations. However, Vitol warns that this apparent stabilization masks deeper vulnerabilities in the refined products markets, where rebuilding inventories and rebalancing refinery output will take far longer than restoring crude flows.

U.S. refiners are currently operating at or near maximum effective capacity and are expected to sustain that pace through at least the end of 2026, according to market analysts. European strategic stockpiles are shrinking, and the lack of a near-term end to the conflict or a credible plan to restore Gulf refining capacity means the gasoline market could tighten sharply in the coming weeks.