Exxon’s Global Trading Head Retires as Company Faces Major Trading Losses
Leadership Change Amidst Financial Challenges
By Stephanie Kelly, Arathy Somasekhar and Sheila Dang
Retirement of Tracey Gunnlaugsson
LONDON/HOUSTON, June 11 (Reuters) - Exxon Mobil's head of global trading Tracey Gunnlaugsson is retiring, two sources with knowledge of the matter said.
Background and Career
Gunnlaugsson, based in Houston according to her LinkedIn profile, was appointed to lead the trading division in 2023 after previously serving as human resources vice president at the company for nearly five years.
Company Response
Exxon declined to comment. Reuters could not immediately reach Gunnlaugsson for a comment.
Exxon’s Trading Losses and Market Context
The oil major's earnings have been dented by what Exxon describes as trading-related "timing losses", despite higher oil prices from the ongoing conflict in the Middle East. The company reported a $3.9 billion paper loss stemming from derivatives in the first quarter which pushed net income down to its lowest level in five years.
Comparison with European Majors
The losses contrasted with the first-quarter trading profits of European oil majors, which reaped billions of dollars from this year's energy supply crunch triggered by the U.S.-Israeli war on Iran.
Trading Strategies: Europe vs. U.S.
European majors have spent decades building trading desks, employing hundreds of people who buy and sell crude, fuels and gas to take advantage of price gaps across regions and time periods, and also taking positions in derivatives markets. However, traders at Exxon, and U.S. competitor Chevron, focus on optimizing flows within their own networks of production, refineries and fuel retail outlets. That approach prioritizes predictability but can limit opportunities to profit from extreme market moves.
Exxon’s Use of Derivatives
Exxon uses financial derivatives to mitigate the risk of price changes during the time it takes to deliver cargoes to customers. The value of the physical shipment is not reflected in earnings until the transaction is complete, which created a large unfavorable timing impact, the company has said.
Outlook and Company Statements
The timing impacts are expected to unwind in subsequent quarters and result in profitability, Exxon CFO Neil Hansen said in an interview last month.
CEO’s Perspective
During the earnings call with analysts, Exxon CEO Darren Woods said the company was confident the losses were a pure timing problem "that will work itself out."
"The timing impact here is primarily driven by the fact that the trading organization is taking advantage of the opportunities in the marketplace and locking in profit," he said.
(Reporting by Stephanie Kelly in London, and Arathy Somasekhar and Sheila Dang in Houston; Editing by Nathan Crooks and Chizu Nomiyama )
