Oil Market Underpricing Iran Conflict Risks, Vitol's Bahrain Chief Says

The oil market is underpricing risks from the Iran conflict and the effective closure of the Strait of Hormuz, Vitol’s managing director for Bahrain, Tom Baker, said on June 2, 2026. The disruption has idled about 14 million barrels of daily Middle Eastern supply, causing what he called the largest oil supply crisis in history. Prices briefly touched $126 a barrel before retreating to about $95. Baker cautioned that once China, which has not imported its usual 5 million barrels per day, needs those physical barrels, prices could spike sharply. “The only solution to higher prices at that point would be demand destruction,” he said, referring to a price level that forces consumers to curb purchases. He added demand destruction is unlikely with oil falling toward $90, leaving the market exposed to a supply shock.