Western sanctions on Russia and Iran are creating record volumes of oil stored onboard vessels, which are preventing a supply glut from forming in global markets - for now. So said oil trader Gunvor Group's CEO Torbjorn Tornqvist this week.
So far, the "enormous amount" of crude being stored on tankers has provided a buffer against greater oil price volatility, even as output and export levels have been impacted by sanctions.
But, "if all sanctions would disappear, this market would clearly be quite oversupplied," Tornqvist said.
Oil supplies are also piling up on land, with U.S. crude stocks rising by more than expected last week on higher imports and reduced refining activity.
Crude inventories rose by 5.2 million barrels to 421.2 million barrels in the week ended October 31, the EIA said, compared with analysts' expectations in a Reuters poll for a 603,000-barrel rise.
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There are even signs of oil oversupply in India - the world's third-largest importer.
India's Reliance is attempting to re-sell some Middle Eastern crude it snapped up last month to replace Russian oil because of Western sanctions, trade sources said.
The refiner halted purchases from Moscow last month after supplier Rosneft was sanctioned by the United States and it bought at least 12 million barrels of spot crude from the Middle East and the Americas, they added.
To replace Russian supplies, Reliance Industries Ltd has bought 1 million barrels of Abu Dhabi Murban crude, 2 million barrels of Upper Zakum, 500,000 barrels of Qatar Land, the sources said.
Reliance is likely to have purchased even more spot cargoes in trades which were unknown to the market, traders said, estimating that it had probably bought about 16 million barrels in total.
However, Reliance has been offering to re-sell some of these cargoes, traders said. Read on for more from our teams in India & Singapore.
