Vitol Said to Post Highest Profit Since 2011 as Oil Prices SwingJavier Blas
Vitol Group earned $1.35 billion last year, the most since 2011, as the world’s largest independent oil trader profited from price swings in the energy market, a person familiar with the company’s accounts said.
Vitol is owned by its employees and does not publish its profits widely, but it does provide financial information to its lenders and some energy groups with which it trades. The person familiar with the accounts asking not to be named, citing confidentially clauses.
The company, formally based in Rotterdam, but with big operations in London, Geneva, Singapore and Houston, reported net income of $837 million in 2013, its worst result in 10 years.
Vitol declined to comment. Chief Executive Officer Ian Taylor earlier this week declined to comment on the company’s profitability, but in an interview he said, “2014 was better than 2013.”
Oil traders such as Vitol and rivals Trafigura Beheer BV, Glencore Plc, Gunvor Group Ltd. and Mercuria Energy Group Ltd. are profiting from the increase in volatility as oil prices plunge to about $50 a barrel, down from $100 a year ago.
Traders are filling tanks to take advantage of contango -- a relatively rare situation where forward prices are higher than current prices, allowing people to buy oil cheap, store the commodity in tanks and sell later, all the while locking in their income through the use of derivatives.
Taylor said in the interview, conducted in Cape Town, that Vitol profited across different business lines.
“We are a very diversified group today,” he said. “We also beginning to have some profits coming back from the investments we have made.”
The company had sales of $270 billion in 2014, down from $307 billion the previous year, the company said last week. It regularly publishes revenue figures, but doesn’t disclose profit.
Oil traders’ sales are largely influenced by the price of oil itself and have little impact on the company’s bottom line.
Vitol had its best year in 2009, when the energy market experienced a strong contango, earning net income of $2.28 billion.
The company has experienced strong growth over the last 15 years on the back of rising oil trade, large price swings and, more recently, investment in storage and refining. In 1999, Vitol earned just $60 million.