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Vitol, the world’s largest independent commodity trader, paid senior employees a record $6.4bn last year, in the latest sign of how companies in the industry have profited from the disruption to energy markets unleashed by Russia’s full-scale invasion of Ukraine.
The $6.4bn payout was made to about 450 Vitol partners including top executives, and comes after the Rotterdam-based, privately owned group reported $13bn in net profit for 2023, its second highest and far higher than its rivals.
Vitol is owned by senior employees spread across trading hubs in London, Geneva, Singapore and Houston, and the remuneration for last year took the form of a share buyback.
Details of the $6.4bn payout are contained in a Vitol company report seen by the Financial Times. Bloomberg first reported on the story. Vitol did not respond to a request for comment.
Volatility in commodity markets brought about by Russia’s full-scale invasion of Ukraine in February 2022 has led to a boom for trading companies.
The invasion sent energy prices soaring as western countries imposed sanctions on Russia, which in turn upended the flow of commodities including oil and gas.
Volatility eased in 2023, but compared to before the Ukraine invasion, remained high.
Vitol chief executive Russell Hardy, reporting on the company’s 2023 turnover in March, said the scale of the commodity market realignment “should not be underestimated”.
Vitol, along with rivals Trafigura and Gunvor, made a combined $46bn in profits in 2022 and 2023, according to Financial Times’ calculations.
Trafigura paid out a record dividend of $5.9bn to the company’s 1,200 shareholders in its most recent financial year, ending in September 2023, when it recorded net profit of $7.4bn.
The huge profits made by trading companies has enabled them to amass as much as $120bn in cash reserves, according to consultants Oliver Wyman.
Some of the cash is now being used for acquisitions. In April Vitol acquired US-based BioMethane Partners, while in June it finalised the purchase of a 35 per cent stake in Saras, an Italian energy company that owns the biggest single refinery in the Mediterranean, on Sardinia.
Last year Vitol’s Turkish subsidiary Petrol Ofisi agreed to acquire BP’s refining business in Turkey.
In the UK, Vitol owns and operates five power plants through its subsidiary VPI, making it a bigger electricity generator than Centrica.
VPI also has three more power facilities being built in the region: two in the UK and one in Ireland.
