Commodity trade major Vitol reported a drop in its 2020 revenue to $140 billion from $225 billion a year earlier as the pandemic plunged its traded oil volumes sharply lower.
The company said it had traded 7.1 million bpd of crude oil and products last year, down from 8 million barrels daily a year earlier.
“It is just over 12 months since Covid-19 was declared a pandemic,” chief executive Russell Hardy said. “The virus shaped our business and our lives in 2020. The extraordinary market conditions in the initial stages of lockdown and sudden drop in demand resulted in huge logistical challenges and market opportunities.”
“With stocks building by over one billion barrels in the early part of the year, the industry had to manage unprecedented circumstances, restructuring supply chains to handle the crude oil and products that neither producers nor consumers could contain. Whilst much demand has returned and the outlook is positive, the recovery has been slower than many anticipated and near-term uncertainties remain.”
Despite the lingering uncertainties, Hardy also said Vitol expected oil demand recovery across most sectors, with the notable exception of aviation. For that, Vitol’s chief executive said, demand recovery would take a while longer.
Vitol reportedly made a profit of $3 billion last year, according to sources cited by Bloomberg, much of it during the worst of the pandemic—the second quarter of 2020.
Over the longer term, Vitol said it expected a shift in energy demand from liquid hydrocarbons to electricity, although it noted that over the medium-term, demand for fuels such as liquefied natural gas and liquefied petroleum gas would grow as economies shift from coal to liquid hydrocarbons.
“At present, and until large scale battery capacity has grown significantly, there will be a need for gas fired generation to help manage the intermittency associated with renewable solar and wind generation,” Russell Hardy said.
By Irina Slav For Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.