Energy trader Gunvor has posted record profits in the first half of the year, as the industry cashes in on volatility in oil and gas markets sparked by Russia’s invasion of Ukraine.
The Geneva-based energy trader, which is controlled by billionaire Torbjörn Törnqvist, said on Thursday its net income after tax nearly quadrupled to $841mn in the first six months of this year, compared with the same period a year earlier. This is more than the profit figure for the entire year in 2021.
“Gunvor’s result during this period, driven by massive global market dislocations, was broad-based across all regions and activities, including crude oil, oil products, natural gas, and liquefied natural gas,” Törnqvist said in a statement.
“Particularly encouraging is the return of substantial profitability in our refining operations and our shipping,” he said, adding that the cause was mainly tight refining capacity worldwide and strong demand, especially in Europe.
Trading volume however fell 16 per cent to 99mn tonnes. Revenues were up 85 per cent on the same period last year due to the significant rise in commodity prices.
Commodity traders have had a significant boost from volatility and disruption in commodity markets caused by the pandemic and the war in Ukraine.
Trafigura also posted a record half-year profit of $2.7bn for the six months ended in March, while Glencore said in June it expected earnings in its trading business for the first half of the year to exceed $3.2bn, the top of end of the guidance it had given for earnings for the entire year.
Commodity prices have been very volatile following the Ukraine war. Brent crude oil surged to a near-record high just under $140 a barrel in March, but was trading about 20 per cent below that price by the end of June.
The European benchmark Dutch TTF wholesale gas price also soared to record highs in March, before falling markedly. It then almost doubled in June as Russia cut supplies through the Nord Stream 1 pipeline to Germany.
Gunvor said it continued to fulfil Russian contracts that were not yet subject to sanctions, but did not refine Russian crude oil. Its efforts to divest its minority stake in a Russian oil products terminal have “not been so far practical or legally feasible”, it said, adding that it “conservatively adapted the valuation of the asset at the end of June”.
Gunvor has pulled back from Russia since 2014, when the US imposed sanctions on Gennady Timchenko, its Russian co-founder, for his alleged ties to President Vladimir Putin.
Timchenko sold his stake to Törnqvist just before the sanctions were announced and has left the company.
“The vast majority” of Gunvor’s profits will be kept within the company to fund further growth, Törnqvist said. It will also continue to invest in non-fossil fuels as part of its “support of the energy transition and energy security”, he added.