* New rules set to be "relatively benign" - Glencore
* Traders say more transparency is difficult, unnecessary
By Emma Farge
LAUSANNE, Switzerland, April 24 Efforts to
increase regulation of physical trade in commodities such as oil
are unlikely to have a big impact on business in this
traditionally opaque sector and would be hard to implement, top
trading house executives said on Tuesday.
Regulatory initiatives on commodities trading have mostly
focused on futures and derivatives, but non-governmental
organisations are also calling for stricter rules on disclosure
for physical commodities deals.
"I have to say I think the potential for regulation in
physically traded markets is relatively benign," Alex Beard,
Glencore's head of oil, told an FT commodities
"I can't see a move to a full-blooded trade regulation of
physical commodities in the future."
Oil traders buying from national oil firms could face new
disclosure rules within a year if measures being discussed by
Norwegian non-governmental organisation the Extractive
Industries Transparency Initiative (EITI) come into force.
EITI's stakeholders include oil traders such as Glencore and
oil-producing countries including the United States.
It is relatively rare for oil traders to buy directly from
oil producers, although these measures could in theory take
effect for those working in countries like Nigeria and Libya.
Other executives for Swiss-based energy traders such as
Gunvor and TOTSA, the trading arm of French major Total
, saw no immediate need to improve transparency of
physical commodity transactions.
"I don't see any reason why you should regulate trade. It
would be very difficult to regulate every transaction as every
transaction is unique," said Torbjorn Tornqvist, chief executive
"Overall, the market has taken quite good care of this
transparency issue," said the president of oil trading at
TOTSA, Pierre Barbe.
Non-governmental organisation Revenue Watch is calling for
full disclosure of price, volume and crude oil grade for every
cargo of oil sold from exporting countries.
Barbe said that his firm would comply with transparency
measures if national oil firms required it.
"We have our own secrets and we don't have to display all
our sales of physical oil where we produce oil for instance from
our field," he said. "It's a matter between us and the host
country ...it's not for others to know," he said.