Vitol, the world’s largest independent commodity trader, on Thursday reported record-high profits of $15bn off the back of the energy crisis, the Financial Times reports.
The profits match the company’s combined earning for the previous six years. They were larger than some of the world’s biggest oil producers, such as Italy’s Eni. The Dutch-registered company’s turnover nearly doubled last year to $505bn, it said last week.
The record profits will mean large payouts for Vitol’s shareholders, made up of approximately 450 senior partners across trading hubs in London, Geneva, Singapore, and Houston.
It comes as many of the company’s rivals, including Trafigura, Glencore, and Mercuria, also reported record profits for 2022. Oil and gas giants such as BP, Shell, and ExxonMobil also saw profits soar to record highs.
The huge jump in Vitol’s profits was enabled by windfalls in power markets, power generation, refining and the trading of liquified natural gas (LNG). The surge in LNG prices in Europe comes as a result of Russia’s invasion of Ukraine, creating price discrepancies that traders capitalised on. Many countries in the EU have been forced to move away from Russian gas, after Russia limited its supplies following sanctions on its crude oil and oil products. Vitol saw its LNG revenue soar last year because it shipped higher quantities of gas to Europe to help replace lost Russian gas.
Year ahead will be “very different”
Vitol chief executive Russel Hardy told the FT Commodities Global Summit that a lot of the profits will be reinvested in capex projects to strengthen energy supply, such as upgrading the efficiency of its power stations.
He said the year ahead will be “very different” to the last in terms of profits and margins, adding that “it’s a much more conservative market going forward, so our strategy and approach has to reflect that”.
Chief financial officer Jeff Dellapina told the summit that the Vitol’s record profits were part of a “cyclical high”.
“Last year, performance was strong. Most things were working well in terms of our integrated investments across refining, production, power generation, so this was quite a positive year,” he said.
Vitol stands as the world’s largest independent oil trader, though it saw a dip in its crude oil trading last year from 2021, after curbing the amount of Russian oil it handled.