Exxon to launch new Global Trading division in bid to boost profits

Quantum Commodity Intelligence - ExxonMobil is creating a global trading division to compete more aggressively with the likes of BP, Shell and commodities trading houses in the high-risk, high-reward world of energy derivatives, reported Bloomberg News Thursday.  

According to Bloomberg, the new division will bring together Exxon's crude, natural gas, power and petroleum product desks, as part of a wider corporate reorganization that also will establish a global business hub to manage finance and procurement, and a new supply chain unit.

Last week, The Wall Street Journal said the energy giant, which posted record profits in 2022, plans to form three new organizations under which it will combine several smaller units including its financial-services, procurement and customer-service groups.   

The new trading division will bring together Exxon’s current trading desks, the company said in an email to employees that was seen by Bloomberg.  

Global Trading, to be formed later this year, will focus on “driving commercial intensity and ultimately delivering industry-leading trading results,” according to the email sent on Thursday. Specific details such as hiring targets and capital commitments were not disclosed. 

Exxon had long shunned derivatives trading, even for hedging purposes, but made a tentative entry in 2018, hiring several seasoned oil traders for essential trading and hedging strategies.

In the same year Exxon also registered to participate in a number of Platts Market On Close (MOC) assessment windows via its EXTAP entity, and has since become a major liquidity contributor in a number of key global benchmarks including Dated Brent and Dubai.