War-fuelled turmoil swells trading windfalls

Commodity trading houses are drawing another surge in earnings as the conflict centred on Iran tears through oil, gas and shipping markets, sending prices higher, widening regional differentials and creating the kind of volatility that large physical merchants have historically turned into outsized gains. The upheaval has hit flows through the Strait of Hormuz, jolted tanker availability, lifted insurance costs and scrambled crude quality balances, giving the biggest energy traders fresh scope to profit from arbitrage, storage, freight and rapid re-routing of cargoes.

The scale of the market shock has been exceptional. Global oil supply fell by 10.1 million barrels a day in March to 97 million barrels a day, with attacks on energy infrastructure and restrictions on tanker movements through Hormuz driving what has been described as the largest disruption on record. Around a fifth of globally traded oil and liquefied natural gas normally passes through the waterway, making even partial interruptions enough to reprice cargoes across Asia, Europe and the Atlantic basin.

That disruption has opened a rich field for firms such as Vitol, Trafigura, Mercuria and Gunvor, whose business models are built on exploiting dislocations faster than producers, refiners or utilities can respond. These groups sit at the junction of physical supply, chartered shipping, storage capacity, credit lines and real-time market intelligence. When a war or sanctions shock splinters benchmarks and forces buyers to hunt for replacement barrels, traders can benefit by sourcing crude from alternative regions, blending grades to meet refinery needs, booking ships ahead of rivals and monetising sudden moves in freight and derivatives markets.

The numbers underline the scale of these firms even before the latest turmoil is fully reflected in results. Vitol reported 2025 turnover of $343 billion and average crude and products trading of 8 million barrels a day. Trafigura disclosed 2025 net profit of about $2.7 billion, while Mercuria posted profit of roughly $1.3 billion. Those figures were recorded before the full financial effect of the March-April dislocation could feed through, suggesting the sector entered the crisis from an already strong base.

Oil prices have reflected the strain in violent swings rather than a one-way move. Brent crude settled at $95.48 a barrel on April 20 after jumping 5.64% in a single session, while US crude ended at $89.61, up 6.87%, as traders reacted to renewed fears over Hormuz and the fragility of ceasefire efforts. Just days earlier, prices had slumped about 9% after Tehran signalled passage for commercial vessels was open for the remainder of a ceasefire period. For major merchants, that kind of whipsaw can be as lucrative as an outright price rally because it enlarges spreads between time periods, grades and locations.

One of the clearest signs of stress has appeared in crude quality markets. The conflict has disrupted exports of medium sour Middle Eastern barrels that many Asian refiners rely on, forcing refiners and marine fuel blenders into competition for scarce heavy sweet crude. Spot premiums for very low-sulphur fuel oil rose above $17 a tonne after surging to as high as $140 a tonne in March, while cargoes from places such as South Sudan and Australia were redirected to fill gaps. Traders able to assemble substitute blends or divert cargoes at short notice have found unusually rich margins.

Shipping has become another profit centre. Saudi Arabia’s East-West pipeline and the UAE’s Habshan-Fujairah line provide partial bypasses to Hormuz, but they cannot fully replace seaborne volumes and both carry security risks of their own. Iraq’s route to Ceyhan has resumed at only a fraction of Gulf export scale, while Iran’s own bypass infrastructure remains incomplete. The result is a premium on optionality: access to tanks outside the Gulf, ships already positioned in the region, alternative loading programmes and the credit strength needed to finance emergency cargo substitutions.

This windfall, however, comes with political and commercial risks. A prolonged crisis can destroy demand, trigger government intervention, prompt strategic stock releases and leave traders exposed if prices collapse as abruptly as they rose. The same volatility that inflates margins can also produce large losses for firms caught on the wrong side of freight, hedges or inventory values. Heightened scrutiny is also likely if households and manufacturers face another round of energy inflation while privately held merchants report bumper returns.