Who is Vitol? The Secretive Oil Trader Behind the Maldives’ Controversial Bunkering Deal

As the Maldives pushes forward with plans to establish a major bunkering hub in Ihavandhippolhu in partnership with Vitol, a cloud of controversy follows the deal. Vitol, a company often seen as a global powerhouse in oil trading, has a deeply troubling history of corruption, bribery, and questionable alliances. Despite its significant global influence, Vitol is a company with just over 3,000 employees, similar in size to some large Maldivian resorts. The real question, however, is why the Maldives would hand over such a strategic national project to a company with such a murky past—without even opening the process to international tenders.

A Legacy of Corruption

Vitol’s dealings have left a trail of controversy across the globe, particularly in politically unstable regions. One of the company’s most infamous episodes took place during the Libyan Civil War. When the rebels fighting against Muammar Gaddafi were struggling to maintain their fight, Vitol stepped in, arranging for the supply of oil that became a turning point in the war. In a dramatic episode, Vitol's then-CEO Ian Taylor personally flew to Benghazi to secure the deal, narrowly dodging anti-aircraft missiles. This move not only supplied the rebels with the fuel they needed but also helped lead to Gaddafi’s eventual downfall. While the deal changed the course of Libyan history, it raised serious ethical concerns about Vitol’s role in exploiting conflict zones for profit.

Vitol’s role in conflict zones did not end with Libya. In Serbia, during the Balkan Wars, Vitol paid $1 million to Arkan, a warlord notorious for his brutal war crimes, to resolve a business dispute over oil supplies to Serbia. Arkan was hired by Vitol to act as a "fixer," ensuring the company’s interests were protected, even as the country faced UN sanctions. This is yet another example of Vitol’s readiness to engage with morally dubious figures in the pursuit of profits.

In 2023, Vitol’s name came up again, this time for allegedly prolonging the war in Ukraine. Ukrainian officials accused the company of exploiting a loophole in EU sanctions, allowing Russian oil products to flow into European markets via Turkey. Despite public commitments to cease trading Russian-origin crude oil, Vitol continued to profit from these dealings, sparking concerns about its role in fueling conflicts to protect its bottom line.

Widespread Corruption and Questionable Practices

Vitol’s questionable practices aren’t confined to war zones. In Iraq, Vitol was caught in the Oil-for-Food scandal, paying $13 million in kickbacks to Saddam Hussein’s regime in exchange for lucrative oil contracts, violating UN sanctions. This resulted in a $17.5 million fine, a heavy penalty for the company’s unethical practices.

In Brazil, Vitol was involved in the infamous Petrobras Bribery Scandal, one of the largest corruption scandals in Latin American history. Vitol paid $8 million in bribes to officials at Petrobras, Brazil’s state-owned oil company, in exchange for favorable oil trading deals. This led to a $135 million settlement with authorities in 2020, underscoring the scale of the company’s corrupt practices. Similarly, Vitol admitted to paying $2 million in bribes in Ecuador and Mexico, hiding these payments through fake consulting contracts and offshore accounts, further exposing the depth of the company’s corrupt dealings.

Tax Evasion: Manipulating Financial Systems

Beyond corruption, Vitol has also been involved in tax evasion schemes. A 2014 investigation by The Independent revealed how Vitol managed to pay a fraction of the UK tax rate by shifting profits from its lucrative London operations to low-tax Switzerland. Despite generating nearly $15 billion in profits over nine years, Vitol paid an average tax rate of just 10.5% on its global earnings. In 2013, the company paid only 2.6% on $846 million in profits, thanks to its deceptive tax arrangements. Vitol’s London-based staff, who act as high-level decision-makers, were presented as mere "brokers," while the actual profits from their deals were funneled to Switzerland, allowing Vitol to avoid paying higher UK taxes.

Missed Opportunities for the Maldives: Why Vitol?

Given Vitol’s long history of corruption and tax evasion, the Maldives government’s decision to partner with the company without an international tender process is particularly troubling. There are local companies, such as Hawks Pvt. Ltd., that could have been considered as partners for the project. A more transparent approach could have included a consortium of local and international companies, ensuring that the profits remained within the Maldives and contributed to local economic development. Instead, by bypassing these opportunities, the government risks handing over a key national asset to a company with a deeply questionable reputation.

The absence of a competitive bidding process has deprived the Maldives of exploring other, more ethical partners, and it raises concerns about whether the country will truly benefit from this deal or whether it will simply become another victim of Vitol’s complex web of global corruption and offshore profits.

Offshore Profits: Who Truly Benefits?

The terms of the agreement between the State Trading Organization (STO) and Vitol remain opaque, raising concerns about where the hundreds of millions of dollars expected to flow through the bunkering hub will actually end up. Will these profits be reinvested into the local economy, or will they be funneled into offshore accounts, much like Vitol has done in other parts of the world?

In Kazakhstan, Vitol secured billions of dollars in oil contracts through partnerships with politically exposed persons (PEPs) connected to the ruling family. The deals were widely criticized as corrupt, with much of the profits being siphoned off into offshore accounts, leaving Kazakhstan with little benefit. Could the Maldives face a similar fate if Vitol follows the same playbook?

Conclusion: Transparency and Accountability Needed

The Maldives’ decision to hand over a major strategic project to a company with such a dark legacy is a risky gamble. Vitol’s history of bribery, tax evasion, and exploitation of conflict zones raises serious concerns about whether the Maldives will see the promised benefits or simply become another chapter in the company’s long history of corruption.

The Maldivian public deserves transparency. The government must provide clear answers on who will benefit from this deal, whether the profits will flow through local banks, and what safeguards are in place to ensure that the Maldives doesn’t suffer from the same corrupt practices that have plagued Vitol’s operations in other countries.

By choosing Vitol, the Maldives may have put its future at risk. Now, more than ever, transparency, accountability, and a focus on local economic empowerment are essential to ensure that this deal does not become yet another global scandal linked to Vitol’s long-standing corruption.

Sources:

1. Brazil's Petrobras Bribery Scandal

• Vitol paid $8 million in bribes to officials at Petrobras, Brazil’s state oil company, to secure favorable contracts in the Car Wash scandal, resulting in $135 million settlement with U.S. and Brazilian authorities.

References:

• U.S. Department of Justice, "Vitol Inc. Agrees to Pay Over $135 Million to Resolve Foreign Bribery Case," U.S. Department of Justice, December 3, 2020, link.
• JDSupra, "Vitol’s Bribery Schemes in Brazil," JDSupra, December 9, 2020, link.
• Reuters, "Petrobras Receives $45 Million in Vitol Corruption Settlement," Reuters, December 30, 2020, link.
• Bloomberg, "Ex-Petrobras Trader Phil Collins Tells Judge Vitol Bribed Him," Bloomberg, November 23, 2019, link.

2. Bribery in Ecuador and Mexico

• Vitol admitted to paying $2 million in bribes to officials in Ecuador and Mexico to secure oil contracts.

References:

• U.S. Embassy in Brazil, "Vitol Inc. Agrees to Pay Over $135 Million to Resolve Bribery Case in Brazil, Ecuador, and Mexico," U.S. Embassy & Consulates in Brazil, December 3, 2020, link.
• Reuters, "Former Vitol Oil Trader Convicted on Ecuador, Mexico Corruption Charges," Reuters, February 23, 2024, link.

3. Secret Libyan Rebel Oil Supply

• Vitol played a pivotal role in supplying oil to Libyan rebels during the civil war, helping shift the conflict's outcome and the eventual fall of Muammar Gaddafi.

References:

• Declassified UK, "11 Years After Toppling Gaddafi, UK Gets Libya’s Oil," Declassified UK, October 26, 2022, link.
• The Guardian, "Libya: Alan Duncan's Links to 'Oil Cell'," The Guardian, September 1, 2011, link.
• The Telegraph, "Ian Taylor, Titan of Oil Trading Who Invested Millions in Reviving Harris Tweed – Obituary," The Telegraph, August 11, 2020, link.
• Medium, "This Small Secret Company Made $505 Billion Trading Energy in 2022," Medium, March 3, 2023, link.

4. Deal with Serbian Warlord Arkan

• Vitol paid $1 million to Serbian warlord Arkan to resolve a business dispute involving oil supplies during the Balkan wars.

References:

• The Guardian, "Oil chief paid $1m to warlord," The Guardian, July 1, 2001, link.
• LMI Trade, "How the World’s Biggest Oil Trader Makes His Billions: Vitol Group (Part 4)," LMI Trade Blog, March 1, 2023, link.

5. Kazakhstan Oil Contracts and Politically Exposed Persons

• Vitol secured billions of dollars in oil contracts through partnerships with politically exposed persons (PEPs) linked to Kazakhstan’s ruling family.

References:

• Bloomberg, "Dutch Prosecutors Probe Trader Vitol’s Activity in Kazakhstan," Bloomberg, August 23, 2024, link
• Public Eye, "How Vitol Became King of Oil in Kazakhstan," Public Eye, November 3, 2022, link.
• Swissinfo, "Swiss Oil Trader Vitol Accused of Profiting from Ties to Elites in Kazakhstan," Swissinfo, December 18, 2018, link.

6. Vitol Tax Evasion

Vitol's use of offshore structures and international loopholes to reduce the taxes paid in the UK and other countries.

References:

• The Independent, "The Truth About Vitol’s Tax Affairs," The Independent, September 28, 2016, link.

7. Oil-for-Food Scandal in Iraq

Vitol paid $13 million in kickbacks to Saddam Hussein’s regime under the UN’s Oil-for-Food program, violating sanctions to secure oil contracts. This resulted in a $17.5 million fine.

References:

• Independent Inquiry Committee into the United Nations Oil-for-Food Program, Manipulation of the Oil-for-Food Programme by the Iraqi Regime, October 27, 2005, link.
• Swissinfo, "Swiss Firm Fined Over Oil-for-Food Kickbacks," Swissinfo, October 17, 2007, link.

8. Deferred Prosecution Agreement

• Vitol signed a Deferred Prosecution Agreement (DPA) in 2020, paying $164 million after admitting to bribing officials in Ecuador, Mexico, and Brazil over 15 years.

References:

• Reuters, "Vitol Pays $164 Million to Resolve U.S. Allegations of Oil Bribes in Latin America," Reuters, December 3, 2020, link.

9. Market Manipulation in France

• Vitol was fined €5 million for manipulating gas prices in France

References:

• Reuters, "French Regulator Fines Vitol 5 Million Euros for Gas Market Manipulation," Reuters, October 2, 2018, link.

10. CFTC Fine for Corruption-Based Fraud and Market Manipulation

• Vitol was ordered by the Commodity Futures Trading Commission (CFTC) to pay $95.7 million for corruption-based fraud and attempted market manipulation.

References:

• U.S. Commodity Futures Trading Commission, "CFTC Orders Vitol Inc. to Pay $95.7 Million for Corruption-Based Fraud and Attempted Manipulation," CFTC, December 3, 2020, link.