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Vitol posts significantly lower sales in 2023

Vitol lost a fifth of its turnover in 2023 compared to the previous year. This was due in particular to falling prices on the energy markets.

According to a communiqué issued on Tuesday, the commodities trader's revenue fell by around 20 percent to USD 400 billion. However, the Geneva-based company had almost doubled its turnover in the previous year (to USD 505 billion) due to high oil prices and the growing gas and electricity business.

In 2023, the company supplied 546 million tons of oil equivalents, an increase of 4% compared to 2022. This increase is primarily due to the rise in gas and liquid gas volumes.

The geopolitical unrest of the previous year continued in the reporting year, Vitol CEO Russell Hardy is quoted as saying in the press release. "At the same time, however, volatility on the energy markets eased and prices fell back from previous highs," he said.

Trade flows converted

In addition, the fact that market participants had "restructured global trade flows" should not be underestimated. "The detour of 5 million barrels of Russian crude oil per day and the redirection of European oil products to India and China displaced flows that had to find a new home," he said.

In the gas sector, 120 billion cubic meters of Russian pipeline gas that used to flow to Europe have been replaced by an additional 62 billion cubic meters of liquefied natural gas (LNG) "and a significant shortfall in demand". The amount of LNG brought to Europe in 2023 would have accounted for half of total global LNG consumption 13 years earlier, in 2010. "This illustrates the rapid development of this market."

Because Russian energy sources were no longer flowing to Europe, Europe had to look elsewhere, according to Hardy. However, the detour of Russian products and the attacks by the Houthi rebels in the Suez Canal have increased transportation distances and thus also the prices for shipping. Vitol expects "the market to remain tight in the short term and pressure on European refineries to continue".

"In the longer term, we have revised our outlook and postponed the peak in oil demand by a few years to the early 2030s," writes the commodity trader. This is because the introduction of electric vehicles is slowing down and Vitol believes that the demand for oil in some developing countries could be higher than expected.

Demand at pre-crisis level

According to the press release, demand for oil returned to pre-pandemic levels last year. However, the recovery took longer for some products such as aviation fuel.

Crude oil and product volumes fell by 1.6% to 349 million tons or 7300 barrels of oil per day. The decline in crude oil volumes of 10 was partially offset by an increase in gasoline and gas oil volumes.

Vitol now expects demand for refinery products to increase by 1500 barrels of oil per day in the current year, so that total demand for oil will rise to almost 105,000 barrels of oil per day.

Natural gas and LNG volumes reportedly increased by 19 and 24 percent respectively. "In the medium term, we continue to see natural gas as a transitional fuel that will replace coal in power generation and is a necessary supplement to intermittent power generation from renewable energies," said the company management.


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