In physical oil trading, information used to be the advantage. Today, the edge belongs to those who can act.

For most of the years I have worked in oil, the conventional wisdom was that information was the edge.

The best traders knew things first. They had the relationships, the regional read, the phone call that told them a cargo was distressed before the rest of the market caught up. I built a career inside that world, first at Shell, then at Gunvor, and later building a physical trading platform from the ground up at E3.

That world has changed, and many good traders are still quietly mourning it.

Satellite tracking, freight analytics, real-time pricing, structured market data and public flow intelligence have drained much of the old information moat. If a tanker changes course in the Gulf, a large part of the market can know very quickly. The asymmetry that paid for a generation of careers has become much thinner.

The easy conclusion is that the trader’s edge has disappeared.

It has not.

It has moved.

It moved from information to infrastructure.

What you cannot buy with a data subscription

Anyone can now buy the same shipping feeds, the same pricing screens and the same analytics. That is precisely why none of it is a real advantage on its own anymore. When everyone can see the same thing, seeing it is no longer the point.

What you cannot buy off the shelf is the ability to act on what you see.

Storage in the right place. Blending capability. A freight position that lets you move a barrel before the window closes. Financing that holds when the market turns against you for a week. Counterparties who will still perform when liquidity tightens and optionality becomes scarce.

These are the things that decide who actually captures a dislocation and who merely watches it on a screen, then writes a smart note about it afterward.

The trader’s job used to be knowing where the value was. Today, the screens often tell everyone that. The job now is being physically and financially positioned to capture it.

The fragmentation premium

This is where global markets are quietly working in the operator’s favour.

As trade flows fragment under sanctions, geopolitics and shifting refining patterns, the same barrel no longer carries one price. It carries several, depending on where it can go, who can receive it, who can finance it and who can actually move it.

That optionality is the real product.

A barrel with destination flexibility, sitting within the right infrastructure, is worth more than an identical barrel that is stuck. The value is not only in the molecule. It is in the system around it.

I think of this as the fragmentation premium, and it is becoming one of the defining sources of value in physical trading.

The more fragmented the world becomes, the wider that premium can become. Transparency made information cheap. Fragmentation made flexibility expensive. The edge now sits in the gap between the two.

IMO 2020 made it visible

The clearest proof I watched in real time was IMO 2020, the sulphur cap that reshaped the fuel oil complex.

Everyone in the market saw it coming. The regulation had been known years in advance. There was no real information advantage to be had.

And yet the outcomes were very different.

The firms with blending capacity, storage, quality control, freight flexibility and customer access were able to reposition supply and capture value as the spread between high-sulphur and low-sulphur product widened sharply. The firms that understood the change perfectly, but could not physically act on it, were left commenting on a move they had correctly predicted but could not fully monetise.

Same forecast. Completely different result.

The difference was infrastructure, not insight.

Where relationships actually fit

None of this means relationships stopped mattering.

They matter more than ever, but the reason has changed.

Relationships are no longer just an information channel. They are part of the infrastructure.

In fragmented and frontier markets, a counterparty who trusts you can be the difference between a transaction clearing and a transaction dying. A producer relationship is access to flow. A banking relationship is financing that holds your position together during a dislocation. A logistics relationship is the difference between theory and execution.

Trust is no longer just how you learn things first.

It is how you execute when execution is the whole game.

The next phase

Fragmentation is unlikely to disappear quickly.

Energy security concerns, sanctions, decarbonisation policy, refinery shifts and a more divided geopolitical map are all pulling in the same direction: toward a world where flows are less predictable and physical positioning matters more, not less.

In that world, the winners will not simply be the firms with the best forecasts. Many forecasts are now widely available. The winners will be the firms that have built the physical, financial and commercial systems to move when the gap opens, and to hold the optionality long enough to be paid for it.

The market has spent two decades making information more transparent.

The opportunity now belongs to the people who understand that the edge was never only about knowing.

It was about being able to move.

Article written by Said Addi