ExxonMobil discovers optionality… OPIS

The OPIS blog has a story on Exxon’s transformation into trading to enhance profitability:

”Until recently, it was rare for ExxonMobil to move product directly to Latin American countries. The company would instead sell fuel FOB its Gulf Coast refineries to trading companies like Glencore, Gunvor, Mercuria, Trafigura and Vitol. Those companies would then take the barrels to destinations around the world, making for a simpler sales process for the major, but limiting the opportunity as well.

More recently, ExxonMobil is doing business with plenty of South American and Central American companies and doing so on a delivered basis.  Some countries have even been offered assistance in financing terminal construction so they could take products more ratably in the future.

But the effort isn’t limited to the Western Hemisphere. Earlier this month, OPIS reported that ExxonMobil chartered a tanker for gasoline delivery from Singapore to the Pacific Northwest. There are reports that the company plans to opportunistically move other cargoes across the Pacific Ocean this spring.

“You would never hear ExxonMobil mention ‘arbitrage’, but it looks like they now have a new focus,” one global trader told OPIS, noting that kind of activity might be expected from BP, Shell or more veteran cargo traders.”