Ian Taylor: Trader who transformed Vitol into an oil powerhouse

Ian Taylor, the trader who helped shape the modern oil market by transforming a small Dutch fuel merchant called Vitol Group into one of the world’s biggest commodity houses, has died.

“It is with great sadness that Vitol today announces the death of its chairman and former CEO, Ian Taylor, from pneumonia, following a long battle with illness,” the company said in a statement. He was 64.

An Oxford-educated Briton with Scottish family roots, Taylor joined Vitol from Royal Dutch Shell in 1985 and took over as chief executive officer a decade later. Despite the occasional brush with scandal, Vitol grew at a rate few in Silicon Valley could match under his watch, increasing net income from $22.9m in 1995 to a record $2.28bn in 2009.

Mixing an easy charm with a relentless business mind, Taylor struck lucrative deals with governments, national oil companies, refiners and producers to transform Vitol into a global player. Today, operations range from trading floors in London, Singapore and Houston, through storage tanks in the Netherlands and the United Arab Emirates, to filling stations in Australia.

“You need to have relationships,” Taylor told Bloomberg News in 2016.

Vitol plays a crucial role in energy markets, buying, selling, blending and transporting crude oil and fuel around the world. In more than half a century, the company has never suffered an annual loss. It earnt $1.5bn in 2017, the last full-year Taylor served as CEO. Battling cancer, he moved to the role of chairman in 2018, when one of his longtime lieutenants Russell Hardy took over.

“Ian was an exceptional man. He combined energy and a determination to succeed with humility, humour and humanity,” Hardy said in the statement. “He challenged all of us to be the best we could be. We owe him a great deal.”

Success brought rewards for Taylor and Vitol’s other employees, who are also the firm’s shareholders. Over the last decade during his tenure as CEO its 350 top employees received a total of more than $10 bn in payouts, according to corporate fillings.

Along with Glencore’s CEO Ivan Glasenberg and Trafigura’s late co-founder and former chairman and CEO Claude Dauphin, Taylor is widely regarded as a pioneer of global commodities trading. He started at Shell in 1978, where he learned oil trading through stints in Singapore and Caracas.

“Ian was one of the last of the pioneers that helped transform the oil trading industry. He will be missed,” Glasenberg, said.

Taylor refused to follow Glencore’s path and become a public company, keeping the firm private despite numerous conversations over the years about an initial public offering, or selling the business to others – at one point a buyout by now-defunct trader Enron was discussed.

Amid Vitol’s soaring growth and profits, Taylor remained at the front line of the firm’s day to day operations. In the midst of Libya’s civil war, Taylor and another top executive, Chris Bake, flew into Benghazi in 2011 to personally negotiate a deal to supply fuel to rebels fighting against the 42-year dictatorship of Colonel Muammar Gaddafi. Vitol would be paid in crude oil.

The agreed Libya deal went awry within days as Gaddafi’s forces blew up a key pipeline. Still, Vitol and Taylor kept up their end of the bargain and were eventually repaid in full.

“It was a deal which, to be honest, got much larger than it should have,” Taylor said.

The head of Trafigura Group, Jeremy Weir, said Taylor was a formidable figure in the modern commodities trading industry, and central to the establishment of Vitol as a success.

“He was also widely liked and admired as a human being, and will be sorely missed by those who knew him and worked alongside him,” Weir said.

As CEO, Taylor suffered the most damaging hit to his reputation in 2007 after allegations Vitol paid about $13m in “surcharges” to the regime of Saddam Hussein to secure oil shipments. An investigation led by Paul Volcker, the former US Federal Reserve chairman, exposed a world of illicit payments, secret bank accounts, and diplomats for hire. Vitol pleaded guilty in the Supreme Court of New York.

“We did a settlement to protect our own staff,” Taylor said, suggesting that without the deal, US prosecutors could have charged individual traders.

Beyond his role in global commodities trading, Taylor is credited with saving and rejuvenating the industry that produces the fabric tweed on the remote Scottish island of Harris. He was well known in the UK as a philanthropist to the arts – opera and ballet were a particular passion – and had been a major donor to the ruling Conservative party. As a pro-European, he was firmly on the remain side of the Brexit debate.

“He was an iconic figure and a man not afraid to go where others wouldn’t, following a long British tradition,” said Jorge Montepeque, a veteran oil market executive.

Ian Taylor, oil trader, born 7 February 1956, died 8 June 2020

© Bloomberg