Vitol handles record amount of fuel as demand leaps

Vitol, the world’s biggest independent oil trader, shipped a record amount of crude oil, petrol and diesel last year, handling more than 7m barrels a day of fuel as demand in key markets such as the US surged.

In an annual review of its performance, the privately owned company said it had moved almost 2.6bn barrels of crude oil and refined products in 2016, up 16 per cent on a year earlier. The amount of fuel Vitol handles is equivalent to the daily oil consumption of Japan, France and the UK.

“[Vitol’s] performance in 2016 was solid, despite challenging market conditions,” said Ian Taylor, the company’s chairman and chief executive, in a statement. Mr Taylor has been at the head of the company since 1995.

The company did not release profit figures but said turnover was $152bn, down from $168bn a year earlier because of a lower average oil price over 2016.

In 2015, the company generated net income of $1.6bn, according to regulatory filings in the Netherlands where it is registered.

Earnings across the industry are expected to have declined in 2016 because there were fewer opportunities to make money by storing oil and selling it later for a higher price. Vitol’s profits, however, may have been boosted by the sale of shale oil assets in the US. The company’s rivals include Glencore and Trafigura.

While crude oil trading volumes rose 16 per cent to 3.4m b/d in 2016, Vitol said the biggest growth had come from gasoline, diesel and liquefied petroleum gas, up 44 per cent, 26 per cent and 131 per cent respectively. This was driven by increased demand in developed markets such as the US and Australia, where Vitol has a large petrol station network, but also Africa.

“Demand growth of 1.4m b/d exceeded our expectations slightly, but the continued efficiency gains within the exploration sector ensured the market was supplied and the impact on price constrained,” Vitol said in its review.

Vitol, which has a stronger balance sheet than many of its peers, said it remained interested in buying assets to complement its core trading business. The company recently joined up with partners including a fund run by George Soros to buy a large petrol station network in Turkey for €1.4bn, the second largest acquisition in the company’s 51-year history.

Once the deal in Turkey is completed Vitol will own more than 4,500 petrol stations worldwide. The company believes it can use its global network of ships, storage terminals and contacts to supply filling stations more cheaply than big integrated oil companies.

As a result of that deal and the growth in trading volumes, Vitol said it had appointed Russell Hardy, a trained engineer who most recently oversaw the company’s refining assets, to a new role as chief executive for Europe, Middle East and Africa. Gerard Delsad, its chief information officer, will take over the running of its operations in Switzerland, a key commodities hub.