Event Overview: Vitol's trading team suffered huge losses in the early stages of the Iran-Iraq War.

According to sources, Vitol, the world's largest oil trader, suffered hundreds of millions of dollars in losses due to misjudging the direction of the oil market at the beginning of the Iran war.

Yaoyao Liu is a prominent and legendary figure in the energy trading world. He represents Vitol in making large-scale and often highly profitable bets in the energy derivatives sector. The size of his trades is so large that even executives from rival companies try to find out the details of his positions.

Some speculate that the main bets that led to the losses included: the expectation of higher diesel prices relative to jet fuel and lower Dubai crude prices relative to benchmark Brent crude.

Earlier this year, military buildup in the Middle East had created a highly tense atmosphere in the energy market. These positions could have potentially been profitable had US President Trump withdrawn the military action at that time. However, with the formal outbreak of war and Iran's closure of the Strait of Hormuz, market prices moved in the exact opposite of Liu's expectations, resulting in a loss on his bet.



One source familiar with the matter said that Liu's team has since recovered some of the losses. Another source added that, overall, Vitol remains profitable this year.

Vitol Company Overview: A Giant Connecting Global Energy

Vitol plays a vital role in the global energy economy. It is one of the few companies that can connect energy producers and end users around the world and manage the flow of oil and other commodities worth billions of dollars.

Founded in the 1960s by two businessmen in Rotterdam, Netherlands, Vitol is currently headquartered in an unassuming building just blocks from Buckingham Palace in the UK. It trades up to 8 million barrels of oil per day, a volume sufficient to meet the oil demands of Japan, Germany, France, and the UK simultaneously.

Vitol has invested in physical assets in the United States and West Africa, including oil storage tanks, gas stations, power plants, refineries, and oil fields. In 2025, the company's revenue reached $343 billion, surpassing that of U.S. energy giant ExxonMobil . Vitol is jointly owned by approximately 600 employees.

In January of this year, after Nicolas Maduro was arrested, the Trump administration sought the assistance of international trading companies to restart Venezuelan oil exports, and specifically contacted Vitol and its Swiss competitor Trafigura for this purpose.

Background of a Star Trader: From Cambridge Graduate to Vitol Trading Legend

Yaoyao Liu graduated from the University of Cambridge with a degree in Chemical Engineering and has published academic papers on quantum chemistry. According to her LinkedIn profile and sources familiar with the matter, Liu was born in China, briefly worked at Goldman Sachs, and officially joined Vitol in 2012.

Wall Street hedge funds that trade commodities have long been trying to poach Liu because of his consistently outstanding performance over the years, including contributing about $2 billion in trading revenue to the firm in 2022.

Liu currently leads a professional team of analysts and traders in Dubai, London, and Houston. The team's operating model is viewed by those inside and outside the company as an internal hedge fund. While other colleagues are busy arranging tanker shipments of physical crude oil and fuel, or conducting physical transactions in electricity and natural gas, Liu's team focuses on betting on financial derivatives contracts linked to the underlying energy markets.

Multiple sources familiar with the matter indicated that Liu's specific positions were kept strictly confidential within Vitol to prevent competitors or even other colleagues within the company from deciphering his trading strategies and manipulating the market in the opposite direction to negatively impact him.

The multiple impacts of war: ship attacks and operational difficulties

The losses suffered by Liu's team were not the only difficulties Vitol faced in the early stages of the war.

Weeks after attacks by the United States and Israel, two ships carrying fuel for Vitol were attacked in the Persian Gulf region, resulting in the death of one crew member.

Sources familiar with the matter revealed that Vitol had pre-arranged a $3 billion credit line to cope with potential margin calls from commodity exchanges due to sharp price fluctuations. As of now, the company has not drawn on this loan arrangement.

During the war, some employees left Vitol's regional headquarters in Bahrain. The company also urgently sought alternative sources of goods to replace those stranded due to Iran's blockade of the Strait of Hormuz.

Furthermore, unable to ship out the oil and liquefied natural gas previously procured from the region, Vitol had to seek alternative sources to fulfill its delivery obligations to customers.

Another thorny issue is that the derivatives the company had previously sold to hedge against fluctuations in Middle Eastern commodity prices suddenly turned into short positions when the crude oil market surged, further exacerbating the pressure.

Other trading companies encountered similar difficulties, but none were as large as Vitol. In contrast, TotalEnergies' trading arm accurately predicted a significant rise in Dubai crude oil prices, thus avoiding substantial losses.

Company Response and Prospects: Resilience Amidst Alertness

For Vitol, this incident was a sobering experience. The company's partners had always prided themselves on successfully avoiding many of the traps that had ensnared their competitors.

According to sources, Vitol briefed bankers in late March on some of the difficulties it faced, including large insurance and cargo-related bills incurred due to its ships being stranded in the Persian Gulf, but did not disclose many details.

Since the COVID-19 pandemic and the Russia-Ukraine conflict, Vitol has benefited from accumulating substantial profits. Compared to some of its competitors, the company relies relatively less on debt when financing its trading activities. If the energy market continues to experience significant volatility, Vitol is poised to profit from it.

Vitol, long based at a meticulously maintained Gulf-adjacent base in Manama, Bahrain, had built a vast network over decades supplying Gulf oil to Asian markets. During periods of relative peace in the Middle East, this business appeared robust and reliable. However, when Trump's military action against Tehran plunged the region into violence and energy facilities became frequent targets, Vitol began to face unprecedented risks.

Summary: The Test for Energy Giants Amidst Turmoil

Despite suffering huge losses from a star trader's bets and multiple operational disruptions caused by the war, Vitol demonstrated strong resilience thanks to its robust capital base, diversified global footprint, and accumulated profits. This event once again highlights the high-risk and high-volatility nature of international commodity trading, especially against the backdrop of sudden geopolitical tensions, where accurately predicting market direction remains a significant challenge for trading giants.