Gunvor CEO Pedersen Flags Strong Refining Margins, Trading Recovery Fuels Profit Surge

Gunvor Group's new chief executive officer said the company's profits have rebounded after a difficult first half of the year, driven by better trading conditions and strong refining margins. Gary Pedersen, who took over from co-founder Torbjörn Törnqvist, highlighted "really strong" results in the third and fourth quarters following a 71% decline in first-half earnings according to Bloomberg. Törnqvist recently sold his majority stake to senior staff as part of a broader leadership transition as reported by Investing.com.

The recovery comes after a volatile year for energy traders, marked by Middle East tensions and U.S. policy shocks that disrupted market positioning. Gunvor reported its worst half-yearly performance since 2020 in August, with net income falling to $120.8 million amid complete upheaval of outright prices and spreads.

Pedersen, a veteran oil trader with previous roles at Koch Inc. and Millennium Management, has positioned himself as a strategic leader for the firm. He said refining margins remain "super big" and arbitrage opportunities have improved, though he did not specify the scale of the earnings rebound. His appointment follows a broader restructuring at Gunvor aimed at stabilizing the firm and setting the stage for long-term growth.

Strategic Shifts and Expansion Plans

Gunvor's renewed focus on refining and distribution assets has helped offset the challenges faced by pure trading operations. Refinery outages in regions such as Africa and Russia, alongside rising crude supplies and stronger-than-expected oil demand, have pushed refining margins to their highest seasonal level in at least seven years. The firm owns a refining facility in Switzerland and has recently expanded into a chain of gas stations in Pakistan.

The company's leadership transition coincides with a broader push to stabilize relations with the U.S., where Gunvor has been in active discussions to invest in oil and gas-producing assets. Pedersen joined Gunvor last year from hedge fund Millennium Management, where he oversaw refined product portfolios, and he has been instrumental in steering the firm's expansion strategy as reported by Investing.com.

Under his leadership, Gunvor has also sought to grow its U.S. portfolio, with an enterprise value exceeding $4 billion. This includes investments in shale gas production, a move aligned with industry trends as other trading firms bet on controlling North American supply chains. The firm is positioning itself to benefit from long-term demand drivers such as AI growth and LNG plant expansions.

Leadership Transition and Market Implications

Törnqvist's departure marked the culmination of a generational shift at Gunvor, with the new CEO emphasizing financial strength and leadership depth as key enablers of growth. "The time is right for this transition," Pedersen said in an interview, noting that the firm has the liquidity and leadership depth to advance its global strategy according to Investing.com.

The change at Gunvor comes as energy trading houses face a more competitive landscape, where refining and distribution have become critical differentiators. A rival firm, Trafigura, reported similar gains in its oil business by leveraging refining and distribution assets.

For investors, Gunvor's performance highlights the importance of diversification and strategic flexibility in the energy trading sector. With markets still navigating geopolitical risks and shifting supply dynamics, firms with robust refining and logistics capabilities may be better positioned to capture value in the coming year.