• Turnover $400bn in 2023 (2022 $505bn)
  • 546mTOE delivered (2022 527mTOE)
  • 7.3mbpd of crude oil and products delivered (2022 7.4mbpd)
  • $2.5bn committed to sustainable investments

Statement from Russell Hardy, CEO:

The geopolitical turmoil which characterised 2022 continued in 2023. In contrast, volatility across energy markets subsided and prices retreated from earlier peaks as physical market participants restructured trade flows worldwide.

The scale of this realignment should not be underestimated, the rerouting of 5 million barrels per day (mbpd) of Russian crude oil and products from Europe to India and China displaced flows which have had to find new homes. In gas, 120bcm per annum of Russian pipeline gas which used to flow to Europe has, to date, been replaced by an additional 62bcmpa LNG and significant demand destruction. Flows of LNG to Europe in 2023 were equivalent to half the global LNG market volume as recently as 2010, illustrating the rapid evolution of this market.

With Russian products no longer flowing to Europe, Europe has had to look further afield, most notably for gasoil. The increase in distance travelled, as a result of the rerouting of Russian product and Houthi attacks in the Suez Canal, has resulted in all-time highs of oil products on-water. Thus, while European road transport demand will begin to wane by the mid-2020s, in the near term we anticipate continued tightness in the market and an ongoing call on European refining.

Longer term, we have revised our outlook, pushing back peak oil demand by a few years to the early 2030s. The pace of EV adoption has moderated and oil demand from some developing markets may be higher than anticipated.

In this context our strategy is to deploy our capital, expertise and global footprint to deliver energy solutions. Energy requirements, in the near and medium term, vary markedly across geographies. By spanning traditional, transitional and sustainable solutions we are able to address these diverse requirements.

In growing demand centres, we are continuing to supply and invest in infrastructure, from refining in Asia, to storage and an expanding retail footprint across Africa, as our downstream company Vivo Energy works towards completing its acquisition of Engen South Africa. Similarly, our Turkish downstream company, Petrol Ofisi, is aiming to acquire BP’s downstream business in Turkey. On completion, Vitol will be invested in circa 9,000 service stations worldwide.

Even in developed markets, ensuring stable supply in the face of sustained demand will require investment in both upstream and refining capacity. In 2023 we consolidated our US upstream activities in VTX and in early 2024 announced our intention to acquire Saras SpA, a leading Italian energy company with a 300kbd refinery.

Similarly, we recognise that ensuring a supply of sustainable energy for the future requires investment today. We have committed over $2.5bn to sustainable investments to date and continue to seek appropriate opportunities. As with the traditional businesses, we will invest where our capital, expertise and footprint can be deployed to best effect; enabling the scaling of nascent markets and sustainable propositions.

At our core we remain an energy trading company and our people are our most valuable asset. In 2023 our turnover was $400bn and we delivered 546mTOE, up 4% on 2022 an increase largely driven by increases in gas and LNG volumes.

Last year oil demand finally recovered to pre-pandemic levels, though some products, such as jet fuel, have taken longer. Our crude oil and product volumes fell slightly (1.6%) to 349mT or 7.3mbpd with a 10% decline in crude volumes being partly offset by increases in gasoline and gasoil volumes. This year we anticipate refined product demand will increase by 1.5mbpd, taking overall oil demand to almost 105mbpd.

Natural gas and LNG volumes grew by 19% and 24% respectively. We continue to see gas as a transitional fuel for the medium term, both in its displacement of coal in power generation and as a necessary complement to intermittent renewable generation.

Power will be the primary form of energy in the future. Our power volumes traded remained stable as we continue to expand our presence. On the trading side we have leveraged expertise to facilitate access to renewable power, whilst investing further in renewable generation to grow our current renewable generation capacity of 1.1GW. Our UK based power company, VPI, is evolving from generation to the provision of power related services, from flexible generation to storage and carbon capture, required for the successful running of the decarbonised grid in future.

Notwithstanding recent concerns, we continue to believe that carbon offsets have a role to play in the transition. Since we established our carbon team almost 20 years ago, our focus has been on working with local stakeholders to develop high quality carbon projects. We very much hope that a strong internationally recognised framework evolves in the near term.

The world of energy is becoming ever more important and ever more complex. The decisions made today may impact generations to come. Geopolitics, energy security and the need for an energy transition present complicated and often competing priorities for government and societies. There is an ongoing need for clear and constructive dialogue, alongside farsighted leadership. Business can be part of the solution, but the effective deployment of capital requires a pragmatic approach, long-term policy and regulatory clarity. We are committed to investing in the future of energy, and will deploy our capital and expertise as best we can.