How Trafigura Extracted Record Profits From Oil Market Carnage

How Trafigura Extracted Record Profits From Oil Market Carnage

Trafigura and other oil traders bought as much oil as they could when prices cratered in April and ... [+] May, but instead of selling it right away they stored it, often aboard supertankers normally used for transport.



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Trafigura, one of a clutch of privately-held oil trading firms, reminded the world last week how good it is to be an oil trader when oil markets are imploding. 

Thanks to its ability to buy oil at low prices, store it, and then sell it later once prices have returned to more normal levels, Singapore-based Trafigura posted its best result in its 27-year history, emerging from this year's oil market carnage as one of its clearest winners. 

Its net profit jumped to $1.6 billion — 84 percent higher than the previous year — on revenues of $147 billion, and its gross profit margin, a measure of money netted per dollar of costs, tripled to nearly 5%. (For comparison, ExxonMobil's



XOM

revenue in 2019, a much better year for the oil market, was $255 billion.)

Trafigura had “stellar revenue, profit and cash flow from operations,” said