Vitol saw a decline in annual profit that is still triple what it earned before Russia’s war in Ukraine shook up commodities markets, as the trading titan reported a rise in energy volumes but dipping prices.
The trader, whose headquarters are in Geneva and Rotterdam, posted a $13bn net profit in 2023, according to reports by Bloomberg and the Financial Times.
The figure marks a drop from $15.1bn in 2022 but is far higher than the $4bn seen a year earlier.
Private Vitol does not publicly disclose its bottom line profit, but its report on annual revenue showed that it continued to see trading volume rises in an energy commodity complex still shaken up by the fallout of Russia’s invasion of Ukraine.
The company reported 546m tonnes of energy delivered for last year, a rise from 527m a year earlier on the back of natural gas, LNG and oil products volumes.
But the pricing environment pulled revenue down to $400bn, from $505bn in 2022.
“The geopolitical turmoil, which characterised 2022, continued in 2023,” chief executive Russell Hardy said.
“In contrast, volatility across energy markets subsided and prices retreated from earlier peaks as physical market participants restructured trade flows worldwide.”
The trader saw a 24% surge in LNG volume.
Hardy described a realignment of European gas markets as countries pivoted away from Russian gas.
“In gas, 120bn cubic metres per annum of Russian pipeline gas, which used to flow to Europe, has, to date, been replaced by an additional 62 bcm per annum LNG and significant demand destruction,” he said in the 26 March report.
“Flows of LNG to Europe in 2023 were equivalent to half the global LNG market volume as recently as 2010, illustrating the rapid evolution of this market.”
Crude and oil product volumes dipped 1.6% last year. Crude slumped 10%, but gasoline and gasoil volumes gained ground.
Hardy said Europe has looked further afield to replace Russian oil product imports, particularly in the gasoil market.
“The increase in distance travelled, as a result of the rerouting of Russian product and Houthi attacks in the Suez Canal, has resulted in all-time highs of oil products on-water,” he said.
“Thus, while European road transport demand will begin to wane by the mid-2020s, in the near term we anticipate continued tightness in the market and an ongoing call on European refining.”
