Vitol chief says weak pound helps costs

11/10/2016 05:36 AST

The head of energy trader Vitol who helped fund the unsuccessful campaign to keep Britain in the European Union said that the pound’s demise since the Brexit vote has helped to lower costs for his London offices.

Ian Taylor, who is also a donor to the ruling Conservative Party, told a Reuters Global Commodities Summit it was too early to say whether London can retain its global financial status because the rules that will dictate Britain’s divorce from the EU have yet to be agreed. Swiss-based Vitol, the world’s largest independent energy trader with a turnover of $168 billion last year, has one of its main offices in London, a commodities trading hub.

Britain’s decision to leave the EU surprised global markets, dragging the pound down to multi-decade lows and sparking fears in the City, London’s financial center, that businesses will flee abroad.

“Obviously, overhead costs inevitably go down in London which I suppose is marginally good for our shareholders in the sense that it’s cheaper to run London, but it’s still a pretty small part of our overall portfolio,” Taylor told Reuters.

“It makes London slightly more attractive,” he said. Many business and top global banks warned they may move staff out of London especially if Britain loses, or fails to renegotiate access to, the European bank passport system. Without it, transactions would be more complicated and expensive.

“It’s hard to see that all the jobs that are here in the City, involving particularly some of the European passporting activities, will still be here but it’s too early to say what’s really going to happen,” Taylor said.

“I’m sure financial organizations are probably inevitably looking at their options but I can’t see London totally disappearing from the world of international finance.”

Vitol trades over 6 million barrels of crude oil and refined products every day, shipping over 300 million tons last year.

Arab News