Expansion-minded Arrow Shipbroking Group has launched a new business as it makes a key growth move into the oil and oil products derivatives sector.
Arrow chief executive Jeremy Palin told TradeWinds the company has established a new division, Arrow Energy Markets (AEM), as part of the Arrow Group.
Palin said AEM is now an FCA-regulated entity in the UK, with regulation pending in some other geographies, including Singapore and Dubai, where the company already has offices.
The CEO said AEM will be focused initially on oil and oil product derivative broking, including crude and refined products, with clear plans to expand into other areas within the energy derivatives sector, including gas, biofuels, renewables and carbon.
Palin said Arrow has been working on this project for “some considerable time”.
Talk has been circulating in the market since December, when it was rumoured that several crude oil swap brokers had been poached from the London desk of PVM Oil Associates, with fingers pointing at Arrow.
Some in the market noted the activity as something of a reversal of recent moves by London-headquartered Oil Brokerage, an established specialist in oil trading that has been moving into tanker broking.
Within November, Oil Brokerage hired away six crude brokers from privately owned house McQuilling Partners, which is headquartered on Long Island in New York, and then added three brokers from the Geneva office of Fearnleys.
Palin declined to go into details on any of the potential new employees.
He said: “We believe we have sourced some of the leading brokers and operations staff from across the energy derivative industry, whose expertise, ambition and cultural values echo those of our shipbroking business.
“We look forward to them joining over the course of 2024, with the intention that broking activities commence in Spring 2024.”
New markets
Palin said the commodity space is dominated by two or three large companies and the new venture will allow Arrow to grow and add some value from its shipping business while also being complementary and dovetailing with its existing brokering activities.
“This new business represents an exciting opportunity for organic growth, building on our existing knowledge and experience in shipbroking and regulated markets.”
Palin said AEM will provide an extra dimension to the services offered to existing clients while also enabling Arrow to target new markets.
He said the creation of the new business is part of the brokerage’s ambitions for growth.
Powerhouse
This publication spoke to Palin in 2021 when he had just been appointed as Arrow’s first CEO and described the brokerage as “not given to standing still” and “always looking for the right people to build desks in markets where we don’t currently operate”.
Questioned this week on Arrow’s original focus, he said dry cargo, newbuildings, sale and purchase and more recently FFAs remain “our powerhouse”.
But he also described the shop’s Copenhagen and Singapore-based tanker projects desks as “very strong” and added that the company would like to expand into the tanker spot market.
Palin revealed that Arrow, which now numbers around 300 staff spread across 16 centres globally, opened new offices in Miami in the US and Bangkok, Thailand, in 2023.
The chief executive said Arrow is not interested in consolidation within broking for the sake of it and prefers to keep its own culture.
“We will continue to grow by employing professional, entrepreneurial and ambitious brokers,” he said.
