Trafigura Reports 60% Drop in 2024 Earnings

Trafigura reported a dramatic 60% drop in profits for 2024, with earnings falling to $2.8 billion, the lowest since 2020, primarily due to a $1 billion oil fraud uncovered in Mongolia. This fraud has led to considerable financial revisions, including a $358 million impairment for the Mongolian business and a $600 million write-off from a previous nickel deal. The company, which had enjoyed strong earnings over the past four years due to market volatility from global events, now faces possible fines from a corruption trial in Switzerland and an impending leadership change as CEO Jeremy Weir transitions to board chairman. Additionally, Trafigura reduced its dividends significantly from nearly $6 billion in 2023 to $2 billion in 2024, reflecting its financial challenges. Despite these setbacks, the firm increased its traded oil and fuel volumes, demonstrating resilience in its core operations. The situation underscores the need for improved corporate governance in the commodity trading sector to mitigate risks associated with fraud and corruption.