Abu Dhabi, UAE | URN | Vitol Group Chief Executive Russell Hardy has urged African countries to increase their fuel storage buffers to protect against disruptions in global supply chains, as energy executives meeting in Abu Dhabi warned that the international petroleum market has limited capacity to absorb further shocks.
Hardy made the remarks on Monday during a panel discussion titled Energy on edge: securing global flows, strategic trade routes and resilient supply chains at the ADIPEC 2026 conference, which brings together energy leaders, policymakers and industry executives.
The discussion brought together Hardy, Horacio Marín, Chairman and Chief Executive of Argentina’s YPF, and Nasser Omair Al Muhairi, Acting Chief Executive of ADNOC Downstream Industry, Marketing and Trading. Amos Hochstein, managing partner of TWG Global, also contributed to the discussion.
The discussion comes as Uganda expands its storage capacity through the planned 320-million-litre Namwabula terminal and relies on Vitol Bahrain as UNOC’s contracted fuel supplier.
However, questions remain about the volume of fuel physically held in the country and whether the new investments will strengthen supply security and protect consumers against future shocks.
Hardy said the market had managed to cope with eight months of major disruption, but warned that it was operating with low inventories and little spare capacity in refined petroleum products.
“The reality is the system is on low inventory, and there isn’t a lot of spare capacity on the product side globally,” he said.
He cautioned that the situation could become more difficult as demand rises again after the seasonal lull towards the end of the year, particularly if production capacity lost in China, the Middle East and Russia is not restored.
“We’re managing, but there’s still a lot of risk in the system over the next six months, and everybody needs to be very cautious and conscious of that,” Hardy said.
His warning has implications for Uganda, which depends on imported refined petroleum products transported through regional corridors. Vitol Bahrain E.C., a company within the wider Vitol group, is the contracted supplier to the Uganda National Oil Company (UNOC) under the country’s centralised fuel procurement arrangement.
UNOC is the mandated importer, while Vitol Bahrain supplies the products under its agreement with the national oil company. Hardy was speaking about global supply chains, not specifically Uganda’s fuel arrangements.
However, his argument that countries need to hold additional stocks raises questions about the level of physical reserves available in import-dependent economies such as Uganda.
“Optimizing your business is not the same as building resilience for things when they go wrong with the supply chain,” he said.
Hardy explained that Vitol carries compulsory stocks in European markets, where governments require companies to maintain minimum reserves.
The company also holds additional inventory where it has supply commitments to airlines and other customers.
“In Europe, it’s obligatory to carry compulsory stocks. So that’s a cost of doing business, and it varies a little bit from country to country,” he said.
He added that the additional stocks help buffer the supply chain when deliveries do not go according to plan.
Hardy estimated that global consumption of jet fuel, gasoline and diesel amounts to about 60 million barrels a day.
Holding an additional 10 days of supplies would therefore require storage for 600 million barrels.
“A day of products around the world, in terms of consumable products that we use in our everyday lives, jet fuel, gasoline, and diesel is 60 million barrels. So to provide an additional 10 days around the world, you need to store an additional 600 million barrels, and multiply that by $100 a barrel, it becomes quite an expensive asset to put into place,” he said.
He nevertheless expects some African countries to consider increasing their storage buffers.
“Particularly in some of the African countries, you will see them trying to put an extra 5-10 days of storage into the system, which obviously buffers them from the events that we’ve seen recently,” Hardy said.
Other panellists argued that building resilience requires more than simply holding additional stocks.
They pointed to the need for infrastructure that can move oil and petroleum products through different routes, adequate shipping and refining capacity, and cooperation between governments and private companies.
Nasser Al Muhairi said the recent disruptions had exposed weaknesses at different points in the petroleum supply chain.
“When this first erupted, the market was short of crude and then now we’re witnessing shortage of shipping capacity, shortage of refining capacity. So it’s not only with crude,” he said.
He argued that resilience must be considered across the entire value chain, from production and shipping to refining and final delivery to consumers.
“I think it’s an end-to-end value chain that needs to be looked at. We need to ensure available capacity from a shipping perspective. We need to make sure that we can deliver these molecules,” Al Muhairi said.
He said ADNOC had invested in infrastructure, manpower, skills and capacity across its upstream, midstream and downstream operations, as well as in its trading and delivery capabilities.
This is key to landlocked countries such as Uganda, where securing petroleum products is not simply a matter of identifying suppliers.
The products must also be shipped, discharged at ports, transported through neighbouring countries and delivered to storage facilities and consumers.
Amos Hochstein, meanwhile, said governments and private companies must work together to finance infrastructure that may not appear commercially attractive during normal market conditions but becomes essential during a crisis.
He said alternative infrastructure had been developed in the region over several decades, often following earlier supply disruptions.
However, the challenge remained finding ways to make such projects financially viable.
“The biggest problem of resilience is that unless you need it, it’s not really all that attractive from a financial perspective,” Hochstein said.
He called for governments to work with financial institutions to structure projects in ways that reduce financing costs and encourage private-sector investment.
Hochstein said the current crisis should be used to build redundancy into the system so that countries are better prepared for future disruptions.
He also warned that the consequences of high energy prices were not evenly distributed.
Some of the demand reduction Hardy had described, he said, came from poorer households in countries such as Bangladesh and India, where people struggled to afford fuel, including liquefied petroleum gas.
“I hope that part of the lesson of what we learned here is we all come together to say how do we mitigate these crises from affecting the people who can afford it the least around the world?” he said.
Marín offered another dimension to the resilience debate, pointing to Argentina’s efforts to increase production and develop export infrastructure.
He said the country’s growing oil and gas production could make it an additional source of supply for international markets.
He described the country’s access to two oceans and its ability to supply markets in Europe and Asia as an advantage when buyers are seeking alternative sources.
Marín also explained how YPF had used a buffer to cushion consumers against sharp increases in petrol prices.
Through a real-time intelligence centre monitoring demand at individual fuel stations, the company had been able to identify changes in consumption and delay passing some price increases to motorists.
He said YPF had communicated to consumers that it would not immediately raise gasoline prices, instead financing the difference and recovering it when prices declined.
Hardy argued that investment in additional production and refining capacity could eventually lower prices by increasing supply, while Marín described a mechanism for temporarily cushioning consumers from price shocks.
The debate comes as Uganda expands its petroleum storage infrastructure following recent concerns about rising fuel prices and disruptions to international supply routes.
Appearing before Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) in October, UNOC Chief Executive Officer Proscovia Nabbanja reported that Uganda had about 70 days of petrol stocks, 57 days of diesel and 85 days of Jet A-1.
However, these figures did not represent fuel physically held in Ugandan storage facilities alone.
They included products in storage, supplies moving through the Kenya and Tanzania corridors, cargoes in transit and scheduled shipments.
This distinction matters because fuel already in the country provides a different level of protection from supplies still exposed to shipping delays or other disruptions.
Nabbanja attributed rising fuel prices partly to disruptions in global supply chains, which had forced suppliers to source products from alternative markets and, in some cases, reroute cargoes around the Cape of Good Hope, increasing transportation costs.
Uganda is also investing in additional storage capacity. On September 18, President Yoweri Museveni broke ground for the 320-million-litre Kampala Storage Terminal at Namwabula in Mpigi District.
The project, estimated to cost US$250 million, is expected to take about 24 months to complete, with commissioning around September 2028.
It is therefore not yet available to provide additional storage during current supply disruptions. Uganda’s existing national storage capacity is estimated at 160 million litres, comprising the 30-million-litre Jinja Storage Terminal, the 70-million-litre Mahathi facility at Kawuku and about 60 million litres held by private-sector oil companies. Permanent Secretary in the Ministry of Energy Irene Bateebe has said Uganda consumes about 240 million litres of petroleum products a month.
She said the new terminal would ideally provide an additional 30 days of strategic storage once deployed. But storage capacity should not be confused with actual reserves.
. The storage project is part of a wider partnership between UNOC and Vitol Bahrain. Following Parliamentary approval, UNOC announced agreements with Vitol Bahrain for financing of up to US$2 billion over seven years.
The financing is intended to support the Namwabula terminal, expansion of the Jinja terminal, extension of the petroleum products pipeline from Kenya, refinery-related developments and other logistics infrastructure. UNOC said the financing builds on its existing fuel supply contract with Vitol Bahrain.
Hardy’s comments do not establish whether Uganda’s current supply arrangements meet the level of resilience he advocates.
But they offer a useful framework for assessing the country’s investments: the ability to secure supplies, move them through alternative routes, hold sufficient physical reserves and protect consumers when international prices rise.
The ADIPEC panel also warned that resilience investments risk being forgotten once a crisis subsides. Hardy said countries should begin planning now, but have the flexibility to build inventories when market prices are more favourable.
Hochstein made a similar point about the need to act before the next disruption, warning that infrastructure projects that are not implemented soon after a crisis can easily lose priority as markets return to normal.
The challenge for Uganda is to ensure that its growing storage capacity and partnership with Vitol translate into a supply system that can withstand prolonged disruption, rather than relying mainly on fuel shipments expected to arrive through regional corridors.
