Mining and commodity giant Glencore's traded oil volumes in 2022 fell 24% year on year, but the company managed to make record profits by taking advantage of global market volatility stemming from Russia's invasion of Ukraine.
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Register Now The Swiss company, reporting full-year earnings Feb. 15, said its volumes of traded crude fell 24% from 2021 levels to 535 million barrels, or around 1.47 million b/d, while refined oil products dropped 23% to 544 million barrels, or 1.49 million b/d.
Adjusted traded earnings reached an all-time company high of $6.38 billion, of which energy trading contributed $5.20 billion, up from $1.40 billion in 2021.
"Our energy departments successfully [navigated] the extreme market imbalances, volatility and dislocations across crude oil, LNG, refined products, coal and logistics infrastructure," Glencore said in a statement.
Glencore has wound down its Russian oil and gas trading, with the EU imposing a deadline in May 2022 to stop business with Russian state producers.
The company has also been shrinking its oil trading volumes from a peak of 5.65 million b/d in 2017.
From its small upstream assets in Equatorial Guinea and Cameroon, Glencore also boosted its oil production to 6.13 million barrels of oil equivalent, or 17,000 boe/d, up from 5.27 million boe in 2021, or 14,000 boe/d.
Market outlook
Looking ahead, Glencore said it expects robust demand for the commodities it produces and trades, but high inflation rates and central bank monetary tightening posed risks to the global economy.
"China's reopening, however, together with a continued global focus on energy security and decarbonization/electrification, mean that demand for many of our commodities is likely to remain healthy, while supply constraints persist and inventories remain relatively low," CEO Gary Nagle said.
He added that the US Inflation Reduction Act and the EU's proposed Green Deal Industrial Plan highlight the need to keep investing in producing critical raw materials, as well as recycling.
The company reiterated that it had written off the value of its minority stakes in Russian state oil company Rosneft and EN+, the parent company of Russian aluminum producer Rusal, for a total of $1.27 billion.
Glencore holds an equity stake of 10.6% in EN+ and a 0.57% equity stake in Rosneft after selling the majority of its holding to the Qatar Investment Authority in 2018.
The company said that for now, it will retain its stakes in the companies as "there is no realistic way to exit these stakes in the current environment."
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