Vitol pays out record $2.9bn to its oil traders

Volatility in crude markets during the pandemic led to surging profits and bonus bonanza for staff

TOP staff at the world’s largest oil trader, Vitol, have shared a record bonus pot of almost $3bn (£2.1bn) after capitalising on volatility in oil markets during the pandemic. The Geneva-based company shares profits among 350 top employees each year through share buybacks, on top of their salaries.

If divided equally the sum would equal about $8m for the partners, who hold stakes in the private company.

The $2.9bn distributed this year means Vitol has shared out nearly $19bn over the past 17 years, according to calculations by Bloomberg, which first reported this year’s pot.

Its remuneration bill soared by two thirds to $1.23bn last year – equal to almost $500,000 for each of its 2,480 staff. A spokesman declined to comment.

Vitol has offices in cities including Rotterdam, where it was founded in 1966, as well as Houston and London. It trades more than 7m barrels of crude oil and products a day.

Revenues plunged by $85bn to $140bn last year as oil prices collapsed during the pandemic.

However, profits soared by almost $1bn to a record $3.2bn as traders exploited the wild swings in the oil price amid a supply glut when coronavirus first struck.

Russell Hardy, the chief executive, said in April: “The extraordinary market conditions in the initial stages of lockdown and sudden drop in demand resulted in huge logistical challenges and market opportunities.

“With stocks building by over 1bn barrels in the early part of the year, the industry had to manage unprecedented circumstances, restructuring supply chains to handle the crude oil and products that neither producers nor consumers could contain.” Like other energy traders, Vitol is trying to position itself as the world starts to cut its reliance on fossil fuels.

In April it bought a 10pc stake in Norwegian hydrogen producer Gen2energy, as well as a wind farm in Illinois.

None the less, Vitol is leading a consortium taking a 5pc stake in the giant Vostok Oil project being developed in the Arctic by Russia’s state producer Rosneft.

The field is one of Russia’s biggest oil projects, comparable in size with the exploration of west Siberia in the 1970s. Rival Trafigura also has a 10pc stake in the project. The deal could give Vitol and other traders access to long-term supplies for the Asian market, and help Vitol boost its relationship with Rosneft.

Alongside Vitol in the consortium is Mercantile & Maritime, led by veteran oil trader Murtaza Lakhani.

Ian Taylor, Vitol’s former chief executive who oversaw its rapid expansion over the past three decades, died from cancer in June last year.