Singapore is well known to be an international oil trading hub where almost all major commodities and trading companies hold trading books here.
Fuelled by government support, an entire ecosystem of credit financing, shipping and logistics, transportation, storage, refining, petrochemical and talent supply has cemented its position as one of the world’s top oil trading hub.
With the sheer amount of companies in Singapore trading, the competition for talent is fierce. We have all seen what can happen to companies when we have hire the wrong people. We have closures such as Hin Leong, Zenrock and Envy. Even with large international companies like Shell, the Bukom heist has proven that the current levels company or regulatory oversight is insufficient to deter the determined villain.
When such companies go down, it puts Singapore’s reputation as a commodity trading hub at risk. While most of the companies here are very well run, the ever escalating competition between the firm pushes the traders to take more risk than needed. When things go bad, there is often a heavy price to pay.
With the climate change being high on the agenda, companies have been working towards being more energy efficient and adopting renewable energy. This means declining oil consumption over the next few decades and thus putting pressure on the existing oil traders already in a very competitive environment.
Singapore must transit from being an oil trading hub to an energy trading hub. The government must provide policy support to build a new ecosystem. It must help its workforce to reskill and transit while defining new regulatory oversights on the system to enable sustainable transition.