Vitol paid out a record-breaking $10.6 billion in share buybacks to its private owners last year, Bloomberg has reported, noting this brought the total in buybacks that the commodity major distributed since 2014 to more than $31 billion.
Vitol is owned by its management and employees, with the number somewhere between 450 and 500 people.
The payout, according to Bloomberg, highlights the continued energy market disruption that has made a lot of money to a small group of commodity trading companies since 2022, the start of the war in Ukraine and the sanctions that tried to restrict Russian energy commodity exports and, to a certain extent, succeeded.
Per Bloomberg, Vitol has reaped the greatest benefits from the situation, booking a net profit of $8.7 billion for last year, which was more than the combined profits of its four biggest competitors, Gunvor, Mercuria, Trafigura, and Glencore.
Yet the amount of money that commodity giants are making is subsiding, Bloomberg also noted in its report. The global energy commodities markets are adapting to the new situation, and their profitability is declining, as evidenced by Vitol’s payout for 2024, which exceeds its profit for the year, Bloomberg said.
Earlier this year, Vitol forecast that oil demand will remain at current levels over the next 15 years at least, shattering earlier predictions from outlets such as the International Energy Agency, which has consistently been saying oil demand growth will peak before 2030.
Demand for crude is set to rise further in the coming years, to peak at around 110 million barrels daily, the commodity giant said in its long-term report from February, adding that after it reaches that peak, it would begin declining, to reach the current level of daily average demand at 105 million bpd in 2040.
By Irina Slav for Oilprice.com
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