Speaking at the Asia Pacific Petroleum Conference (APPEC) conference in Singapore on Monday, Hardy said sour crude economics will remain stronger than sweet because of the OPEC+ cuts, Reuters reported.

"Because of the OPEC+ cuts, there's not sufficient supply (of sour crude) for all these complex refineries in India, Kuwait, Jizan, Oman and China," he said.

"They all want to buy sour crude, but it is not really a Western supply, it is mainly from the Persian Gulf. There are too many customers and not enough material to go around."

Hardy also said Brent oil prices have been "pretty stable" trading between $72 and $88 per barrel for nearly a year. Price volatility is coming from the products market rather than crude, he said.

"The volatility is coming from products because refining capacity is very, very tight. Lots of refineries closed during COVID and the West really doesn't have the product making capacity it needs, now that Russian exports are making their way to Asia," Hardy said.

Global crude price Brent rebounded in the past two months to more than $80 a barrel after producer group the Organization of the Petroleum Exporting Countries and its allies – a grouping known as OPEC+ -- deepened supply cuts.

Analysts expect Saudi Arabia, the de facto leader of OPEC, to extend additional output cut of 1 million barrels per day for a fourth month in October.

Russia sanctions

On Russia, Hardy said Western sanctions on the country are working as Russian oil is trading at lower price levels.

"Western sanctions on Russia are working ... In the sense that they're creating less or lower revenues, lower invoice prices for Russian goods," he said.

"The flip side of sanctions is that it is creating stronger bonds between BRICS countries ... So I think that's a very negative aspect," he said, referring to the BRICS group of major emerging economies, made up of Brazil, Russia, India, China and South Africa.

Hardy also said Iranian oil production is up to about 3.1 million barrels per day (bpd), while he expects "a little more oil" to be legally exported from Venezuela as more export licenses have been made available.

Iran's oil minister was quoted in August as saying by state media that the country's crude oil output will reach 3.4 million bpd by end-September, despite U.S. sanctions remaining in place.

Venezuela's oil industry is also under sanctions, and its output is down around 750,000 bpd, from 2 million bpd previously.

China outlook

China, meanwhile, has been taking advantage of price cycles to build inventories, said Hardy.

Long term, though, China is pushing for electrification and plans to run its electric vehicle fleet on domestic coal-fired power, he said.

"When you look at China's long-term policy, they are steadily looking to decrease their oil consumption."