Commodity traders turn Ukraine crisis into opportunity

Price volatility caused by the war in Ukraine sent commodity traders’ profits soaring. The high profits generated by the increase in prices were reflected in the balance sheets of the sector.

This year, the price volatility caused by the war has allowed companies that transport energy, metals and other raw materials around the world to enjoy their most profitable periods. Companies like Glencore, which trades raw materials, and Vitol Group, which trades energy products, have broken revenue records this year.

THEY TURNED THE CRISIS INTO AN OPPORTUNITY

However, it was the Trafigura Group, a French multinational commodity trading company headquartered in Singapore, that benefited most from the commodity price shocks. Trafigura multiplied its profits by taking advantage of price fluctuations and arbitrage opportunities caused by the war between Russia and Ukraine.

The metals and energy trader has obtained more than the sum of its profits in the last 4 years. The company made a record profit of $7 billion this fiscal year.

INCREASED MORE THAN TWICE

Profit more than doubled in the 12 months to September, bringing total gross revenue to $318.5 billion, Trafigura said today. Chief Financial Officer Christophe Salmon said it was an “extremely strong year” for the oil and petroleum products business.

A significant part of the profits were shared with the senior management of the Trafigura company. The company paid $1.7 billion in dividends to 1,000 shareholders. However, due to sanctions against Russia, the total volume of products traded during the period decreased in the second half of the fiscal year.