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Vitol generates record net profit of $4bn in 2021

Vitol, the world’s largest independent energy trader, achieved record profits last year amid rising demand for energy with easing lockout restrictions.

The privately owned group generated more than $ 4 billion in net profit, with revenues nearly doubling to $ 279 billion amid rising oil and gas prices, according to people who saw a copy of its results. Gross profit rose $ 1 billion to $ 6 billion, they said.

The characters defeated Vitoll’s previous ones Net profit record Of about $ 3 billion in 2020, when the company took advantage of the panic sale in the oil market to accumulate cheap crude oil barrels and sell them for a profit in the futures market.

Vitol, which owns some 400 senior partners spread across the energy trading centers of London, Geneva, Singapore and Houston, is not the only trader to benefit from 2021 lagging margins.

Geneva-based Mercury reported a record net profit of $ 1.25 billion a year through December on Friday, while Trafigura generated a net profit Of $ 3.1 billion in fiscal year 2021 and transferred nearly $ 1 billion to its senior staff.

Vitol could not be immediately reached for comment.

Commodity traders are the intermediaries of the global economy, linking raw material suppliers – most often in developing countries – with consumers in rich and fast-growing countries.

Vitol, which is still registered in the Netherlands but its top executives are mostly based in London, is far from a well-known name in the UK, but has grown rapidly in the last two decades.

This allowed the company to return huge amounts of cash to its senior executives and merchants, Including a $ 2.9 billion payment in 2020.

Last Week, The company said it was trading 7.6 million barrels per day of oil and petroleum products in 2021, up from 7.1 million barrels per day when demand recovered, with all of its major markets seeing strong growth except jet fuel. It did not disclose a net profit figure.

Raw Brent Rose more than 50 percent in 2021, while Fuel prices A sharp rise in the second half of the year against the background of the energy crisis in Europe.

Bankers believe 2022 could be another shocking year for commodity traders who have access to large credit facilities and can manage the extreme price moves caused by The war in Ukraine and the sanctions on Russia.

Brent crude reached a 14-year high of nearly $ 140 a barrel earlier this month before retreating, while wholesale gas prices in Europe briefly rose to a high of 335 euros per megawatt hour. The price is now around € 105 MWh.

In this environment, merchants needed more cash to finance their day-to-day business, as rising commodity prices would cost a tanker refill with crude oil.

At the same time they faced huge margin calls – or cash requirements – to cover hedging taken for future sale of goods. As a result, many merchants have had to withdraw credit facilities from bankers and set up backup facilities.

Facing a cash shortage some small and medium players have Withdrew from the marketWhich leaves companies like Vitol and Trafigura competing little in the crude oil auctions run by the refineries.

“Price volatility worries everyone,” Russell Hardy, CEO of Vitol, told representatives last week at the FT Commodities Global Summit in Lausanne. “People can not easily predict what is going to happen in the future and market participation is declining because of this level of uncertainty.”

Vitol’s net profit figure for 2021 was first reported by Reuters.

Vitol generates record net profit of $4bn in 2021 Source link Vitol generates record net profit of $4bn in 2021

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