Iran was hit early in the war: multiple top energy traders' ships stranded, derivatives losses incurred

In the early stages of the Iran war, the world’s largest energy traders not only failed to profit from the intense market volatility—they instead found themselves in trouble, with vessels getting stuck, cargo damaged, and derivative positions taken in the wrong direction, catching these trading giants—who are used to making money off volatility—off guard.

According to the British Financial Times report on Thursday, when the conflict broke out on February 28, top traders such as Vitol, Trafigura, and Mercuria held short positions in certain energy markets, which had long been viewed as oversupplied.

After Iran effectively blocked the Strait of Hormuz, multiple vessels were trapped in the Persian Gulf, preventing cargo from moving, leaving traders in a high level of uncertainty about their own positions. Mercuria and Trafigura both recorded losses in the early days of the war, although some of those losses were later partially recovered.

Energy prices surged sharply and swung to extreme levels as a result of the war—conditions that are usually an ideal environment for traders to cash in. This time, however, the crisis was so large and the situation so complex that market participants were under widespread pressure. To address margin pressure, Vitol and Trafigura each secured an additional $3 billion in credit facilities, while Gunvor received $1.5 billion.

Vessels trapped—physical business hit first

As the world’s largest independent energy trader, Vitol was particularly hard hit due to the large scale of oil product flows it handles in the Middle East. When the war broke out, Vitol had more than 10 cargo batches trapped in the Persian Gulf. On March 12, two ships carrying Vitol naphtha cargoes were ignited and burned by Iran, resulting in one crew member’s death.

Trafigura had 10 vessels in the bay, all chartered to other companies for use and not ships carrying its own goods; Glencore had one vessel trapped. For the vessels still stuck in the gulf, as the conflict dragged on, insurance and operating costs climbed sharply—since the war began, Persian Gulf vessel insurance costs (set on a weekly basis) have risen more than sixfold.

Vitol also had to evacuate employees from Bahrain and deal with an operational disruption at the UAE’s Fujairah oil export port. Vitol has a refinery and oil storage facilities in Fujairah. This port’s infrastructure has been attacked by Iran multiple times, but Vitol’s own facilities have not yet suffered direct damage.

Derivative positions taken the wrong way—loss rumors denied

Beyond the impact on the physical business, Vitol also suffered losses in some derivative trading. According to people familiar with the matter, before the war broke out, multiple traders held short positions in certain energy markets long seen as oversupplied, and the sharp price surge triggered by the war battered those positions.

Rumors have circulated in the market that top traders suffered losses totaling tens of billions of dollars. But people close to the relevant companies said these claims are not true, or they grossly exaggerate the scale of actual losses.

In addition, several junior derivative traders have recently left Vitol. However, according to people familiar with the matter, it is still unclear whether this move is directly related to the wrong-direction market bet—leaving after the spring bonus season is a commonplace occurrence for traders.

Credit expansion—waiting for the 2026 opportunities

Jean-François Lambert, head of commodity advisory firm Lambert Commodities, said that under current conditions, delivering cargo to its destination is “extremely difficult—a complex and delicate task.” But he also noted that this round of volatility will bring “excellent opportunities,” and “from a profit perspective, 2026 is very likely to be a very good year.”

There is an essential difference between this crisis and the energy crisis triggered by the Russia-Ukraine war in 2022 to 2023. At that time, Vitol, Trafigura, Mercuria, and Gunvor all recorded substantial profits. This time, however, the uncertainty over whether cargo can arrive on time has itself become a major challenge—the question of whether the cargo that traders have bought and hedged will ultimately be delivered remains unknown.

To cope with margin pressure caused by sharp commodity price swings and the Hormuz blockade, major traders have begun expanding their credit reserves. Vitol and Trafigura each added $3 billion in credit facilities, while Gunvor added $1.5 billion to ensure sufficient liquidity buffers can be maintained under extreme market conditions.

Risk warning and disclaimer

        The market involves risk; investment requires caution. This article does not constitute personal investment advice, nor does it take into account any special investment objectives, financial conditions, or needs of individual users. Users should consider whether any views, opinions, or conclusions in this article are consistent with their specific circumstances. You assume responsibility for any investment made based on this.