ABU DHABI — Western sanctions targeting Russia and Iran have led to an unprecedented amount of oil being stored on ships, effectively preventing a global oversupply, according to Gunvor Group CEO Torbjorn Tornqvist.

Speaking at the ADIPEC energy conference in Abu Dhabi on Wednesday, Tornqvist explained that restrictions imposed by the European Union, the United Kingdom, and the United States — particularly the latest U.S. measures against Russia’s oil giants Rosneft and Lukoil — have created large volumes of oil stranded on tankers.

“The amount of oil being held offshore right now is enormous — something we’ve never seen before,” Tornqvist said. “If all sanctions were lifted suddenly, the market would be significantly oversupplied.”

Despite these disruptions, Tornqvist noted that the excess supply has helped maintain market balance, limiting price volatility and stabilizing global energy markets.

Oil prices have declined for three consecutive months, driven by concerns over potential oversupply as OPEC and its allies continue ramping up production while output from non-OPEC countries also rises.

At the same conference, Mercuria Energy’s CEO and co-founder Marco Dunand estimated that global oil supply could surpass demand by up to 2 million barrels per day next year. However, he pointed out that sanctions could temper that surplus, bringing it closer to 1 million barrels per day.

“Global inventories remain low, but oil stored on the water is increasing,” Dunand said. “This buildup suggests the supply glut is forming gradually and may start impacting the market in the coming months.”

BP also reported a smaller-than-expected decline in third-quarter underlying profits on Tuesday, further highlighting the complex dynamics shaping the global oil sector.