Commodity traders are struggling with Trump’s ‘tweet-driven’ market volatility

Commodity traders say they are facing higher costs and disruptions because of President Donald Trump’s “tweet-driven” market swings, prompting some European companies to consider changing their work hours to match his online activity. 

Executives voiced their concerns at the FT Commodities Global Summit in Lausanne. They report that his frequent social media posts, often issued at odd times, are creating sudden price moves in commodities and slowing investment decisions.

Richard Holtum, who recently became Trafigura’s chief executive, said he was “semi-seriously” thinking about moving his team’s Geneva trading hours to 2 pm through midnight. “The European hours are pretty quiet in the morning these days,” he said. “You just wait for President Trump to wake up and decide how your day is going to go.”

The president announced this week on Truth Social that he planned to impose 25% in “secondary tariffs” on countries purchasing oil from Venezuela. The post read, “Venezuela has been very hostile to the United States and the Freedoms which we espouse. Therefore, any Country that purchases Oil and/or Gas from Venezuela will be forced to pay a Tariff of 25% to the United States on any Trade they do with our Country. All documentation will be signed and registered, and the Tariff will take place on April 2nd, 2025, LIBERATION DAY IN AMERICA”

That message sparked uncertainty for traders and caused frustration at several firms. Bill Reed, chief executive of US-based CCI, said the new tariffs were forcing his company to “scramble” to decode the rules. “It consumes an enormous amount of resources,” he noted and added that confusion over policy changes had put many expansion plans on hold. “It’s possible that people are holding off making decisions … it’s slowing me down,” Reed said.

Trading firms are responding by becoming more cautious due to Trump’s unpredictability

Jeff Dellapina, chief financial officer of Vitol, said the wave of Trump’s statements and his non-stop executive orders could override the detailed market analysis that commodity traders typically rely on. 

“When you wake up in the morning, those statements can overwhelm any research we do, so it just naturally draws away risk capital from the market,” Dellapina explained. He added that the resulting environment tends to “compress volatility, which then has obviously put us in much tighter trading ranges in core commodities.”

Gunvor, a Geneva-based energy trading firm, said it was scaling back its exposure. “This kind of volatility we are seeing, which is tweet-driven … is very difficult for us to trade around, so we are fairly risk-off right now for that reason,” stated chief financial officer Jeff Webster. 

He also pointed out that crude oil and other commodities were now moving within a narrower price band, which made it harder to secure higher profits. “Our traders are having to work twice as hard to generate maybe half of the profit they were before,” Webster said.

Still, not everyone took a negative view. Some participants noted that swings and disruptions also bring chances for those who manage to position themselves correctly. 

Commodity traders often profit from price gaps if they can move raw materials from areas with lower prices to areas with higher prices. 

Guillaume Vermersch, chief financial officer of Mercuria, stressed that any upheaval can still create openings for creative trading. “There is always a solution to be brought,” he said, explaining that these conditions let traders offer services to customers who want to reduce their exposure.

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