‘Vitol achieves US$3b profit last year’
Vitol Group reaped record profits of around US$3 billion last year as the world’s largest independent oil trader surfed the dramatic moves in energy markets, according to people familiar with the matter.
The results are the latest indication of the bonanza that oil traders enjoyed last year when the commodity plunged amid a Saudi-Russian price war in the early days of the Covid-19 pandemic and then staged a sharp recovery as the Organisation of the Petroleum Exporting Countries plus cut production.
Vitol has not yet closed its last year’s accounts, and the final profit figure may change, the same people said, asking not to be named because the information isn’t public.
The company may use some of last year’s earnings for writedowns, reducing the final net income figure.
The trading house expects to show a net profit of around US$3 billion last year, higher than the previous record of US$2.3 billion booked in 2009 and 2019, said the sources said.
Vitol, owned by about 350 of its partner-traders, made a large chunk of its profits during the second quarter, when oil demand collapsed, allowing traders to buy cheap crude and store it while locking in a profit by selling forward the oil on the futures market at higher prices.
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Each day, Vitol moves eight million barrels of crude and petroleum products — which are enough to meet the demand of Germany, France, Italy, Spain and the United Kingdom combined.
The company, which operates from offices in London but is ultimately controlled through a holding company in Luxembourg, does not announce its results publicly but shares them with bankers and others.
A Vitol spokesman declined to comment.
Vitol is navigating one of its biggest changes in leadership, after the death of long-time chief executive and chairman Ian Taylor last year.
Battling cancer, Taylor moved to the role of chairman in 2018, and one of his longtime lieutenants, Russell Hardy, took over as chief executive officer.
Other top executives have also taken a step back from day-today operations, including Mike Loya, who ran the Americas business from Houston and left the company last year, and David Fransen, who was head of the Geneva office.
Kho Hui Meng, the long-time head of its Asian division, also retired last year.