European Oil Giants Beat Energy Traders At Their Own Game In 2022

• According to data from Bernstein Research, Shell, TotalEnergies, and BP earned a combined $37 billion in pre-tax earnings in 2022.
• Those remarkable profits were larger than the combined profits of the four biggest private energy traders.
• While comparing the figures between private traders and oil giants is not a precise art, the general trend shows that the trading arms of the oil giants are increasingly important.

Europe’s oil giants saw their trading arms rake in some $37 billion in pre-tax earnings last year, overtaking the estimated $34 billion made by the world’s largest energy traders, with soaring profits attributed to the events since Russia invaded Ukraine. 

According to data from Bernstein Research cited by The Financial Times, Shell generated $16 billion in pre-tax earnings from its energy trading arm, while TotalEnergies took in $11.5 billion and BP earned $8.4 billion. 

These figures compare to Vitol’s record energy trading profits for last year of nearly $15 billion, followed by Trafigura’s $8.5 billion, Gunvor’s $5.4 billion, and Mercuria’s $4.9 billion. 

“Overall the [three European] oil majors led the pack . . . generating around $37bn in 2022 we estimate, across molecules and electrons,” analysts Oswald Clint, Alex McColl and Edouard Nelson said in a research note published by the Financial Times.  

On Tuesday, despite falling oil and gas prices, BP reported $5 billion in profits for Q1 2023, beating analyst estimates and Q4 earnings, citing “exceptional” gas trading and “a very strong oil trading result”. 

Bernstein Research noted that while it is often difficult to create a comparison due to complicated financial disclosure elements and while some of the figures are not directly comparable, the earnings results show a clear increase in the importance of trading activities for European oil giants.

That new trend continues to gain momentum with U.S. giant ExxonMobil announcing in February that it would create its own global trading division later this year in a major reorganization to drive “commercial intensity”. 

The buzz around trading with the currently uncertain price outlook across energy products has led to growing appetite for a share of the profits,” Argus cited Exxon as saying in a note to employees. 

By Charles Kennedy for Oilprice.com

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