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    Home > Top Stories > Top trading houses speak at commodities conference
    Top Stories

    Top trading houses speak at commodities conference

    Published by Wanda Rich

    Posted on March 23, 2022

    4 min read

    Last updated: January 20, 2026

    Vitol CEO Russell Hardy speaks during the 20th Asia Oil & Gas Conference in Kuala Lumpur
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    Quick Summary

    (Reuters) – Executives from the world’s largest trading houses and mining companies are at the FT Commodities Global Summit this week, discussing market trends, cyber security and the impact of the conflict in Ukraine.

    (Reuters) – Executives from the world’s largest trading houses and mining companies are at the FT Commodities Global Summit this week, discussing market trends, cyber security and the impact of the conflict in Ukraine.

    Below are comments from participants:

    BEN LUCKOCK, TRAFIGURA CO-HEAD OF OIL

    “I think you will see record backwardation and you will see $150 a barrel this summer,” adding that north of $200 was also possible.

    “You’ll know at the end of April what the total loss of Russian oil is. As it stands right now, there’s a vast amount of Russian oil there…Russians have cancelled crude cargoes and stored some (that haven’t sold).”

    PIERRE ANDURAND, HEAD OF ANDURAND CAPITAL MANAGEMENT

    “We are very low stocks and things are getting worse every day. Russia is a game changer …We won’t be back to normal business in a few months and we need to plan for that.”

    “We have some work to do to bring demand down.”

    CHRISTOPHE SALMON, CFO OF TRAFIGURA

    “We need a fully-functioning commodities futures market and what we’ve observed is a decrease in open interest. Assuming the situation does not normalise, there will be consequences of this inefficient futures market into physical.”

    RICHARD DOLCETTI, CFO OF CASTLETON COMMODITIES

    “Markets work best when there are a lot of participants…to the extent that initial margin requirements are so prohibitive that people need to go OTC (over-the-counter).”

    “It’s really navigating all that uncertainty and looking at the liquidity position. If you’re not going to trade exchange, and more OTC, then you are trading liquidity risk to credit risk. You need that balance that.”

    GUILLAUME VERMERSCH, CFO OF MERCURIA

    “At some point there may be a liquidity crunch in the extreme scenarios that we have discussed where banks may say ‘this is it’. That’s why diversifying sources of liquidity is important.”

    JEFF DELLAPINA, CFO OF VITOL

    “Clearing banks have started to increase more than the exchange margins but that is their prerogative and their credit risk. Of course we are kicking and screaming and saying it’s totally unjustified…but it’s natural, exchanges tend to lag the calculations and banks that endure the credit risk tend to take different views.”

    MARCO DUNAND, CEO OF MERCURIA”How do you price forward natural gas if you don’t have a view about how things are going to react or what the EU will do on sanctions. It’s hard to price anything right now,” Dunand said.

    On the longer term economic outlook, he said: “From an economic perspective, Russia will be a loser … they cannot sustain a long period of sanctions. Europe won’t do particularly well either with a refugee crisis at the same time as we have to pay higher commodity prices. On a relative basis, we will suffer a lot more than in the United States.

    “…The big winner is going to be the GCC (Mid-East Gulf countries). They’re going to be a power broker in this.”

    JEREMY WEIR, CEO OF TRAFIGURA

    Weir said the company acted very quickly to address liquidity constraints and margin call risks.

    “From our perspective, we’re back to normality … Banks assisted in the process.”

    Weir also spoke of concerns over potential fuel shortages.

    “The diesel market is extremely tight and we’re possibly heading to stockouts,” he said, referring to exhausted inventory.

    “Europe can probably afford to pay. The problem is what happens to Africa and Latin America. We’re very concerned about the stockouts due to take place in Africa, which relies heavily on diesel for power generation.”

    TORBJORN TORNQVIST, CEO OF GUNVOR

    Tornqvist said the natural gas market was broken and that Dutch TTF wholesale gas futures – used as a European benchmark – are no longer fit to be used for the growing liquefied natural gas (LNG) market.

    “The tradeability of gas has exploded over the last five years and a proper benchmark to absorb that kind of volume was shown not to be there,” he said.

    “The whole thing is paralysed now. We are in the middle of a storm.”

    RUSSELL HARDY, CEO OF VITOL

    “The shock of the Russian invasion to commodities is enormous. People have reduced activity in futures, there’s less open interest in oil markets which increases price volatility,” Hardy said.

    “The longer the war goes on, the greater the chance of an economic recession.”

    “If the Russian oil dislocation extends to the 2-3 million barrel per day mark, it will be difficult to cope … We expect higher prices and that will crimp demand and we expect more stock releases.”

    “We’re seeing some demand destruction already.”

    (Reporting by Julia Payne; editing by Barbara Lewis, Jason Neely and Louise Heavens)

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