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Privately held commodity major Vitol has raked in close to $15 billion in profits for 2022 amid the energy crisis that struck Europe and spread around the globe last year.
This is what Bloomberg’s Javier Blas tweeted today, quoting unnamed people in the know. The Financial Times had reported the same figure earlier, also citing unnamed sources familiar with the company’s financial performance.
The FT report noted that the 2022 profit figure was equal to Vitol’s combined annual earnings for the previous six years. Bloomberg’s Blas noted the 2022 earnings figure was three times higher than Vitol’s previous record, booked for 2021.
Vitol also did a lot better than its commodity trading peers, even though their 2022 results were also at record highs. The company attributed the strong performance to soaring prices in electricity markets, its power generation business, oil refining, and LNG trading.
Vitol said earlier this month that its turnover for 2022 had doubled from the previous year to reach $505 billion.
The news that a commodity trader had made such a massive profit immediately led to a reaction from political circles. The leader of the UK’s Liberal Democrats, Ed Davey, called for the extension of a windfall tax for the energy industry to commodity traders, the FT reported.
“It is simply not right for companies to make enormous profits out of the misery caused by Putin’s invasion of Ukraine,” Davey said.
Meanwhile, Vitol’s chief executive Russel Hardy said at an FT event that the commodity trader will be reinvesting a lot of its record profits in capex projects aimed at strengthening energy supply. Normally, Vitol distributes most of its profit among its owners.
Hardy also said that this year was unlikely to bring a repeat of Vitol’s 2022 performance, noting that “it’s a much more conservative market going forward, so our strategy and approach has to reflect that”.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com