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Trafigura Books Record Profits In Volatile Oil Market

Trafigura, one of the world’s largest independent oil traders, reported on Friday a record-high net profit for the six months ended March 31, as the market turmoil and volatility following the Russian invasion of Ukraine drove commodity prices sky-high.

Trafigura booked a net profit of $2.7 billion for the six months to end-March, a record high result which was up by 27 percent compared to the same period of the previous financial year.

Revenues jumped by 73 percent to $170.6 billion due to the higher commodity prices and the volumes Trafigura traded. 

Trafigura’s trading volume increased across the board as the trader looked to help customers to reorder their supply chains in challenging times, the company said. As a result, oil and petroleum products volumes increased by 14 percent compared to the first half of 2021, to an average of 7.3 million barrels per day (bpd), while non-ferrous metals volumes grew by 16 percent and bulk minerals volumes by 13 percent.

As required by the EU and Swiss sanctions, Trafigura stopped trading crude oil with sanctioned Russian entities before the May 15 deadline, it said.

Trafigura does not expect the challenging market conditions to go away anytime soon, Executive Chairman and CEO Jeremy Weir said.

“Commodity inventories are at perilously low levels across metals and energy markets as demand continues to outstrip supply, following a sustained period of structural under?investment in natural resources production over several years,” Weir noted.

Trafigura doesn’t yet see a slowdown in physical demand for oil and metals, its principal trading segments, Weir said. Robust demand “points to a tight market for commodities and heightened prices for some time to come.”

“Significant investment will be required to produce, process and transport energy, minerals and metals to meet future needs and support the ongoing energy transition,” Trafigura’s top executive said.

Commenting on the global commodity markets, Saad Rahim, Trafigura’s Chief Economist, said:

“A resurgent China might be good for global economic growth, but given that commodity inventories are already extremely, and in some cases unprecedently, low, it remains to be seen how prices might react from here. Inflation is already problematically elevated, but Chinese demand for commodity imports could further spur inflationary pressures.”  

By Tsvetana Paraskova for Oilprice.com

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