AInvest Newsletter
Daily stocks & crypto headlines, free to your inbox
Big Oil's Trading Desks Adopt Prudent Risk Management Amid Volatility
ByAinvest
Thursday, Jul 31, 2025 8:11 am ET1min read
Big Oil's crude traders are dialing back risk due to geopolitics-led volatility, according to Shell Plc CEO Wael Sawan. The industry executives have pointed out that such market turbulence isn't easy for traders to deal with, leading them to adopt a more prudent risk-management approach. The oil majors are tight-lipped about their trading operations, but handle more barrels than many top merchants.
Big Oil's crude traders are dialing back risk due to geopolitics-led volatility, according to Shell Plc CEO Wael Sawan. The industry executives have pointed out that such market turbulence isn't easy for traders to deal with, leading them to adopt a more prudent risk-management approach. The oil majors are tight-lipped about their trading operations, but handle more barrels than many top merchants.Shell's second-quarter earnings and those of its peers reflect the impact of geopolitical events on crude markets. The company's sales and revenue for the second quarter were USD 65.4 billion and USD 66.4 billion, respectively, down from USD 74.5 billion and USD 75.1 billion a year ago. Net income was USD 3.6 billion, a slight increase from USD 3.5 billion in the prior year [2].
Geopolitical factors such as US President Donald Trump's tariffs and military maneuvers have made crude markets highly unpredictable. Norway's Equinor ASA, for instance, lamented the "different type of volatility" that makes it "very hard to trade around," leading to a dip in its second-quarter profit compared to a year earlier [1].
The oil majors are learning to sit out price swings rather than chasing every movement. This cautious approach is crucial for investors to understand, as it reflects the industry's response to the uncertain geopolitical landscape.
In today's market, Big Oil isn't chasing every price swing. Rather, it's learning when to sit them out. That's an important nuance for investors.
References:
[1] https://www.bloomberg.com/news/newsletters/2025-07-31/big-oil-s-trading-desks-have-a-warning-message-for-investors-about-geopolitics
[2] https://www.marketscreener.com/news/shell-plc-reports-earnings-results-for-the-second-quarter-and-six-months-ended-june-30-2025-ce7c5fddd98cf224
Ainvest News articles are AI-generated using advanced large language model (LLM) technology designed to analyze and synthesize publicly available data and news. While AI tools assist in producing initial drafts and insights, all AI generated content published on Ainvest is subject to comprehensive human editorial review before publication. A designated human editor reviews, verifies, and approves each article for factual accuracy, coherence, and compliance with AInvest Fintech Inc’s editorial and disclosure standards.
Despite these review procedures, the information provided may still contain inaccuracies, incomplete data, or time sensitive references due to the inherent limitations of AI generated analysis and evolving changes. The material is provided strictly for informational and educational purposes and does not constitute personalized investment, legal, or financial advice. Readers should independently verify all facts, figures, and statements before making any decision based on this content.
AInvest Fintech Inc. its affiliates, and partners accept no liability or responsibility for any direct or consequential losses arising from reliance on this content. All articles and analyses are subject to revision, update, or removal without prior notice to maintain accuracy and integrity in our publications.
Comments
No comments yet