Oil Trader Vitol Made Record Payout to Staff During Trading Boom in 2015

Independent oil traders are typically big winners when the oil price crashes, as it offers arbitrage and storage opportunities.

Vitol Group paid its top officers a special dividend of $820 million in 2015, as the world’s largest independent oil trader benefited from energy-market price swings. The company enjoyed one of its most profitable years on record in 2015, with a 15 percent increase in net income to $1.6 billion, its highest in six years, according to a regulatory filing with the Dutch Chamber of Commerce.

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The sharp increase in Vitol’s earnings followed a strong year for oil traders in 2015 as they reaped rewards from price volatility that allowed them to lock in profits by storing crude to be sold later at higher prices.

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Independent oil traders are typically big winners when the oil price crashes, as the glut in supply provides them with arbitrage and storage opportunities. The favorable trading environment propelled Vitol to distribute the huge dividend among a group of about 350 top employees who are also shareholders.

During a seven year period, Vitol shareholders were awarded payouts amounting to $6.4 billion, the filings show. However, they should not expect similar rewards in the near future as the company faces headwinds as the oil market stabilizes and the gap between current and future prices narrows.

Vitol’s profit in H2 2016 dropped more than a third from a year earlier. The company, which handles about 6.2 million barrels of oil and products a day, has already cut its staff’s bonuses by 28 percent to $313.8 million during the six months to June 30, 2016.

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