Eni and Mercuria form 50/50 trading joint venture to rival Big Oil desks

Italian oil major Eni is merging its trading operations with Swiss house Mercuria in a 50/50 joint venture designed to capture the kind of outsized profits that BP, Shell and TotalEnergies generate from their in-house trading desks.

Eni agreed to form an equally owned commodities trading joint venture with Mercuria, combining the Italian major's asset portfolio with the Swiss firm's trading and risk management capabilities to compete with European rivals that have long dominated energy trading.

"This partnership brings together two highly complementary organizations with a shared long-term vision for energy markets," said Marco Dunand, chief executive officer of Mercuria, in a statement. "By integrating physical energy flows with world-class trading, logistics and risk management capabilities, we will create a more agile and efficient platform that maximizes value across the supply chain."

The joint venture will operate independently through a holding structure with international trading hubs, covering oil, biofuels, gas, liquefied natural gas and related logistics and infrastructure rights. Eni shares traded 0.29% lower on the day of the announcement. The transaction remains subject to customary regulatory approvals and other conditions precedent.

The deal marks Eni's attempt to close a profitability gap with European peers whose trading desks have delivered billions in profit during periods of market volatility. BP, Shell and TotalEnergies each operate among the largest in-house trading operations in the energy industry, generating outsized returns during events such as the dislocation triggered by the Strait of Hormuz closure in the Middle East. The last time a comparable geopolitical shock hit oil markets — the 2022 Russia-Ukraine supply disruption — European oil majors' trading divisions collectively contributed more than $15 billion in profit, according to industry estimates.

Stefano Pujatti, director of global trading at Eni, said the venture is intended to "expand our trading footprint, enhance profitability for both partners, and generate long-term value through operational efficiency and robust risk management."

Mercuria, established in 2004, has grown into one of the largest independent commodity trading houses globally, alongside rivals such as Vitol, Trafigura and Gunvor. The partnership gives the Swiss firm access to Eni's upstream and downstream asset base, providing stable supply flows and balance sheet support, while Eni gains Mercuria's trading infrastructure and market access across global energy markets.

For Eni, the joint venture represents a structural shift from its traditional model of using trading primarily to optimize its own production toward a profit-center approach that mirrors the strategies of its larger European competitors. BP's trading division, for example, has been a consistent earnings driver, contributing an estimated $3 billion to $5 billion annually in recent years, while Shell's trading operations are embedded across its integrated gas and downstream segments.

The move could also pressure other mid-tier European energy majors such as Repsol, OMV and Equinor to pursue similar partnerships or acquisitions to build trading capabilities. With Brent crude trading above $80 per barrel and global LNG markets undergoing a structural shift after the 2022 supply crisis, the ability to capture margin across the value chain has become a key differentiator for integrated energy companies.

This article is for informational purposes only and does not constitute investment advice.