Vitol $85 billion revenue hit offset by trading profits

LONDON (Reuters) - Global energy trader Vitol suffered an $85 billion fall in revenue last year, but its profits were boosted as trading plays offset the impact of the COVID-19 pandemic on oil demand and prices.

FILE PHOTO: FOTO DE ARCHIVO. Logo del comercializador de materias primas Vitol Group en Ginebra, el 4 de octubre de 2011. Foto tomada el 4 de octubre de 2011. REUTERS/Denis Balibous/File Photo

Many traders benefited in 2020 from extreme oil price volatility and storage opportunities. In April last year, U.S. light sweet crude went negative for the first time and benchmark Brent futures touched two-decade lows before rebounding.

In a statement on Tuesday, Vitol said its revenue dropped to $140 billion last year from $225 billion in 2019. The Swiss firm does not disclose its net profit. Bloomberg quoted sources last month saying Vitol made a record net profit of about $3 billion last year.

Traded oil volumes fell to 7.1 million barrels per day (bpd), compared with 8 million bpd in 2019, as oil demand contracted during coronavirus lockdowns.

Total global oil demand fell by 8.8 million bpd in 2020, said Vitol, which is the world’s biggest independent oil trader.

Rival Trafigura said its oil and metals trading divisions had record profits in its financial year ending September 2020 while Glencore’s trading division had its best year since 2008.

The marketing arms of Royal Dutch Shell and BP also posted strong results that helped to compensate for upstream losses.

The oil sector is, however, under pressure from a drive led by policy-makers and some investors to shift to a lower carbon economy. Vitol said it was adapting, but predicted oil demand had yet to peak.

“We continue to believe that demand for oil will not peak for another decade, but nonetheless we must position our business for a lower emissions world,” Vitol chief executive Russell Hardy said in the results statement.

The company said it is growing its renewable energy portfolio and has committed over $1 billion to green projects globally while expanding its liquefied natural gas (LNG), natural gas, power and carbon trading.

“Longer term we anticipate a shift in energy demand away from liquid hydrocarbons towards power. We anticipate that, in the medium term, demand for hydrocarbons such as LNG, natural gas and LPG will grow,” he said.

The firm will publish its first ESG report this quarter. Most of its renewables investments are in wind, solar and biogas projects, especially in the United States.

In Britain, Vitol is leading a project to decarbonise the industrial Humber River estuary, removing 8 million tonnes of carbon dioxide each year by them mid-2020s.

Reporting by Julia Payne; Editing by David Goodman and Barbara Lewis