A single shipment of Russian oil caused between KR40 million and KR80 million ($6.5 million-$13.1 million) in losses for failed fuel supplier OW Bunker after executives at its Singapore subsidiary failed to hedge the 177,000 tonnes of oil they had bought, Danish press reports.
OW Bunker Singapore had purportedly been buying cheap oil in the Black Sea for some time and selling it at a profit in Russia and elsewhere, but the practice backfired after oil prices began to collapse in earnest during October.
The oil had reportedly been purchased in the Black Sea without the knowledge of OW Bunker management just before oil prices started to plunge, and in the 45 days it took to travel to Vladivostok in eastern Russia, the value of the cargo had decreased significantly.
The imminent loss, however, was never publicly disclosed, which was highly unusual and disappointing, according to Johnny Madsen, investment manager at Danish Wealth and Asset Management.
Read more: DR