The world's largest physical oil trader, Gunvor, has warned that the confluence of heightened tensions in the Middle East and a seasonal demand trough will push oil prices through more severe and unpredictable fluctuations in the second quarter.
On April 21, according to the UK's Financial Times, Gary Pedersen, CEO of Gunvor, stated that the period from April to June represents a lull between winter and summer driving seasons, during which markets could become &#34;very turbulent,&#34; with oil price trends increasingly driven by headlines rather than fundamental supply-demand dynamics.
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&#34;This is a more challenging and softer period; we need to stay vigilant. Frankly, the market could be very volatile.&#34;
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The International Energy Agency (IEA) forecasts a daily global oil demand decline of 1.5 million barrels in the second quarter—the steepest drop since the pandemic—while OPEC's forecast is more moderate at 0.5 million barrels per day. This divergence in demand outlooks alone has added significant uncertainty to the market.
<h2>Seasonal Demand Lows Resonate with Geopolitical Risks in Q2</h2>
Pedersen noted that the second quarter has historically been a seasonal low point for oil demand, while ongoing tensions in the Middle East have further exacerbated market instability. He indicated that oil prices may be influenced more by geopolitical news than by actual supply and demand fundamentals.
On the demand side, there is a significant divergence between IEA and OPEC forecasts—the former projecting a daily decline of up to 1.5 million barrels, compared to just 0.5 million for OPEC. This discrepancy itself reflects high uncertainty regarding demand prospects, meaning any data surprises could trigger sharp price reactions.
Pedersen also pointed out that despite several recent sharp declines in oil futures—which he partly attributed to Trump's &#34;masterful&#34; political messaging—the physical crude market remains tight, with buyers actively seeking alternative supplies to replace volumes lost due to disruptions in the Gulf region.
Facing a highly uncertain market environment, Gunvor's core response strategy involves strengthening physical crude trading while strictly managing derivative exposures.
Pedersen defined the core concept of this strategy as &#34;stress risk&#34;—the danger of forced liquidation amid extreme and unpredictable price swings. &#34;Stress is what turns off the lights, so we ensure we measure stress risk every single day,&#34; he said.
This strategy was shaped by hard lessons learned during past crises. Following the outbreak of the Russia-Ukraine conflict in 2022, soaring natural gas prices led Gunvor to forcibly close trading positions due to rapid price spikes, exposing weaknesses in its risk management framework.
Pedersen stated that prior to the Iran conflict, the company conducted a comprehensive review of all positions and risk exposures, maintaining normal trading operations throughout the crisis—including substantial purchases of crude released from the U.S. Strategic Petroleum Reserve. &#34;We encountered no liquidity constraints, were able to trade continuously, maintain liquidity, and focus on all arbitrage opportunities,&#34; he said.
In terms of business layout, the United States has become Gunvor's most critical strategic hub. &#34;We are focused on expanding our footprint in the U.S., and we remain very bullish on U.S. natural gas and crude,&#34; he said.
Additionally, Pedersen revealed interest in acquiring refining assets. He believes that years of refinery capacity closures in Western markets have created structural opportunities. &#34;With the arrival of demand growth, the outlook for the refining sector is very positive,&#34; he said.

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Gunvor warns that the combination of Middle East tensions and seasonal demand lows will drive more volatile oil price swings in the second quarter, with trends driven by geopolitical news rather than fundamentals; widening divergence among institutional demand forecasts further amplifies uncertainty. In response, the company plans to strengthen physical crude trading while strictly controlling derivative "stress risk"

- Gunvor warns that increasing tensions in the Middle East, combined with seasonal demand lows, will likely lead to volatile oil prices in Q2 2026.  
- CEO Gary Pedersen noted that the period from April to June typically sees decreased demand between driving seasons, making the market more susceptible to geopolitical news.  
- The International Energy Agency projects a significant demand drop of 1.5 million barrels per day, while OPEC predicts a lighter decrease of 500,000 barrels, reflecting heightened market uncertainty.

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World's Largest Physical Oil Trader: Oil Prices to Face 'More Volatile' Swings in Q2