NEW McKinsey 2025 Commodities Trading Report- EBIT value pools down by more than 30%

NEW McKinsey 2025 Commodities Trading Report- EBIT value pools down by more than 30%

McKinsey and Company launched their 2025 Commodities Trading Report. The report offers a fresh look at how traders are positioning themselves to capture the next S-curve in commodity trading.

This year’s report highlights a major shift: for the first time since 2018, EBIT value pools havecontracted by more than 30% in 2024 compared to last year - a reset after years of bumper profits. But despite this reduction, the long-term outlook remains strong with EBIT is expected to reach $115 billion by 2030, growing at 10% annually - more than double the average of the past decade.

What does this mean for energy? We’ve extracted the key points for your convenience:

Oil & Oil Products 

• Oil & oil products EBIT decreased by approximately 40% in 2024, continuing a sustained decline from record-breaking highs in 2022, when margins more than doubled historical averages. 

• Reduced demand for gasoline and diesel, along with increased global refining capacity, pushed down refining margins, leading to refinery closures in Europe and the United States. 

• Geopolitical developments in the Middle East led to increased crude price volatility in Q3 2024, despite an overall decline in oil price volatility compared to 2023. 

• In the short term, data show China moving away from its role as the primary driver of global demand (a mantle likely to be taken up by non-OECD economies) 

Power & Gas 

• Power and gas EBIT declined by approximately 40% in 2024, but market liberalization and electrification trends could drive long-term growth. 

• Power purchase agreements (PPAs) in Europe surged to 21 gigawatts (GW) in 2024, driven by corporate demand for renewable energy. 

• Some grid and market operators in the United States are revising forecasts to accommodate a 15% annual increase in power demand from data centers through 2030. 

LNG 

• LNG EBIT declined by 23% in 2024, partially due to US export capacity coming online more slowly than expected. 

• European gas prices remain about 50% higher than in 2021, even after significant demand reductions and warmer winter seasons. 

• LNG prices could drop by up to 30% by late 2026 or early 2027, reflecting additional liquefaction capacity coming online in the United States.