Top Energy Traders Hit in Early Iran War: Ships Trapped, Derivatives Face Losses

In the early stages of the Iran war, the world's largest energy traders not only failed to profit from intense market volatility but instead found themselves in deep trouble—with ships trapped, cargoes damaged, and derivative positions caught on the wrong side, catching these giants, who typically thrive on volatility, off guard. According to a report by the Financial Times 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 that had long been considered oversupplied. Following Iran's de facto blockade of the Strait of Hormuz, multiple vessels became stranded in the Persian Gulf, preventing cargo circulation and leaving traders in a state of high uncertainty regarding their positions. Mercuria and Trafigura both recorded losses in the initial phase of the war, though some of these losses have since been partially recovered. The energy price surges and extreme volatility triggered by war are usually the ideal environment for traders to reap windfall profits. However, the sheer scale and complexity of this crisis have put market participants under widespread pressure. To cope with margin pressure, Vitol and Trafigura each secured $3 billion in additional credit lines, while Gunvor obtained $1.5 billion. Ships Trapped, Physical Operations First to Bear the Brunt As the world's largest independent energy trader, Vitol was particularly hard hit due to its massive scale of oil product flows in the Middle East. At the outbreak of the war, Vitol had over 10 cargoes trapped in the Persian Gulf. On March 12, two ships carrying Vitol's naphtha cargoes were set on fire by Iran, resulting in the death of one crew member. Trafigura had 10 vessels in the Gulf, all of which were chartered to other companies and were not carrying its own commodities; Glencore had one vessel stranded. For the ships still remaining in the Gulf, insurance and operating costs have soared as the conflict continues—since the war began, Persian Gulf shipping insurance premiums (determined on a weekly basis) have risen more than sixfold. Vitol also had to evacuate staff from Bahrain and deal with operational disruptions at the Fujairah oil export terminal in the UAE. Vitol owns a refinery and storage facilities in Fujairah; while the port's infrastructure has been attacked by Iran multiple times, Vitol's own facilities have not been directly damaged to date. Derivative Positions Caught on the Wrong Side, Rumors of Losses Denied Beyond the impact on physical operations, Vitol also suffered losses on certain derivative trades. According to sources familiar with the matter, before the war broke out, several traders held short positions in energy markets that had long been considered oversupplied, and the price spike triggered by the war dealt a blow to these positions. Rumors circulated in the market of top traders losing billions of dollars, but individuals close to the companies stated that these claims were untrue or severely exaggerated the actual scale of losses. Furthermore, several junior derivatives traders recently left Vitol, though sources say it remains unclear whether these moves are directly related to misjudged market bets—traders leaving after the spring bonus season is a common occurrence. Credit Expansion, Awaiting Opportunities in 2026 Jean-François Lambert, head of commodity consultancy Lambert Commodities, stated that in the current environment, delivering cargoes to their destinations is "extremely difficult, a complex and delicate task." However, he also noted that this wave of volatility will bring "excellent opportunities," adding that "from a profitability perspective, 2026 is likely to be a very good year." This crisis differs fundamentally from the energy crisis triggered by the Russia-Ukraine war in 2022–2023. At that time, Vitol, Trafigura, Mercuria, and Gunvor all recorded bumper profits. This time, the uncertainty of whether cargoes will arrive as scheduled has become a major challenge—whether the cargoes traders have already purchased and hedged can ultimately be delivered remains an unknown. To cope with extreme commodity price fluctuations and margin pressure caused by the Hormuz blockade, major trading houses have moved to expand their credit reserves. Vitol and Trafigura have each added $3 billion in credit lines, while Gunvor has added $1.5 billion, to ensure a sufficient liquidity buffer under extreme market conditions.