KEY POINTS
- Vitol sees metals as key to future growth beyond oil.
- Hardy expects significant expansion as oil demand slows.
- Recent acquisitions and hires align with Vitol’s metals strategy.
At the Financial Times Commodities Summit in Singapore on Thursday, CEO Russell Hardy stated that Vitol, the world’s largest energy trader, is shifting its focus to the metals market to develop, as the oil demand is predicted to peak globally over the next ten years.
Global oil demand likely to peak within a decade
Hardy sees a lot of potential in the metals industry as the globe gradually slows down its demand for petroleum, particularly as it transitions to an electrified and energy-efficient future. According to Hardy, the oil industry will probably peak in ten years. “The bigger metal markets—copper, aluminium, and steel and iron ore—are of interest to us.” In line with Vitol’s plan to diversify outside its conventional oil base, these metals are essential for the development of electric infrastructure, renewable energy technologies, and automobiles.
According to mining.com, Vitol has already demonstrated a strong commitment to this new strategy by aggressively hiring seasoned metals traders from leading rivals such as Trafigura, Mercuria, and Glencore. As Vitol gains a competitive edge in metals, Hardy hopes to capitalise on the company’s record profits of $13.2 billion from the previous year. Hardy thinks this increase is in line with the metals market’s anticipated growth. Noble Resources, a Hong Kong-based trading company that specialises in coal, oil, and metallurgical coke, was purchased by Vitol in August.
This acquisition enhances Vitol’s position in energy-transition resources and broadens its portfolio into Asia. According to the Financial Times, French energy giant TotalEnergies has expressed interest in trading copper, and other trading behemoths like Gunvor and Mercuria are expanding their metals businesses.
New acquisition and expanding metals teams signal market shift
These actions highlight the wider change in the industry as businesses adapt to the predicted drop in demand for crude oil. “The expected drop in petroleum and the increase in metals are somewhat yin and yang,” Hardy said. “We see a big role in that space, and metals are positioned for significant expansion as the electrification phase of the energy transition accelerates.” Hardy conceded, though, that it would take years and a distinct competitive strategy to establish a metals company the size of Vitol’s oil division.
Given the fierce competition in the metals business, Vitol will need to establish its “edge” and “pathway” in the industry. “We’re not putting any pressure on ourselves to be at a certain place in three to five years,” Hardy said, adding that the goal is for ten years.
