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Bloomberg agency said that commodity traders in London are following the approach of some of their Swiss peers in moving to Dubai to establish their business there, as the emirate moves from being a central point for crude oil trade, to a major center for energy trade. The agency explained that Dubai has always tried to attract more commodity companies, invest in banking infrastructure and develop futures contracts traded on the stock exchange, and these efforts helped bring about a transformation after the war in Ukraine.
And while London has a greater presence in commodities trade, more energy traders are now moving or expanding from the capital of the United Kingdom to Dubai, due to a number of important advantages offered by the latter, on top of which is the increase in the number of arrivals from commodity traders to it, and the positive results they reap. In addition to the low taxes, luxurious lifestyle that Dubai lives in, as well as the highly digital nature of business, all of these are increasingly necessary to attract the best talent and global sectors.
Historic trading centers
Last year, Hartree Partners and Freepoint Commodities were among the companies that moved their oil and energy trading employees and senior executives to Dubai, according to people familiar with the matter who asked not to be identified, illustrating how it got started. Historic commercial centers, such as London, are losing ground with the increasing attractiveness of the principality.
This comes as part of a broader boom in Dubai and the UAE, which is benefiting from the influx of foreign wealth. In this regard, the arrival of millionaires in cryptocurrencies, bankers relocating from Asia, and wealthy Russians seeking to protect their assets have boosted real estate prices in the UAE, in general and in Dubai in particular.
“We’ve seen well-known hedge funds that have recently opened offices in Dubai, as well as independent commodity traders,” said Jonathan Funnell, partner at CEO search firm Sidley Marion. He added, “The tax incentives are clear, but for some there is a sense that Dubai is well positioned to become a major commodity trading hub.”
Dubai has courted commodities companies for decades, establishing a free trade zone in 2002. Since then it has introduced oil and gold contracts, while regional banks have increased their offers to finance trade flows. For European energy and gas traders, the time zone differences between Dubai and the old continent guarantee an opportunity to retain more profits, while the sector is witnessing a remarkable boom. Dubai also benefits from its proximity to some of the world’s largest oil and gas producers, primarily Saudi Arabia, Abu Dhabi and Qatar.
energy team
Hartree is an example of a move to Dubai, where it is expanding its office there to 20 from 12 employees, including people from London, according to people familiar with the matter. Some members of the company’s European energy team have already taken this step, including energy bureau chief Brendan Micock, and gas traders are expected to follow suit.
“Gas and energy trading can be conducted in particular with a great degree of geographic flexibility, given the highly digital nature of the business,” said Anders Borsborg-Smith, managing director of the Boston Consulting Group.
In turn, Ian Lowett, CEO of the London-based commercial brokerage group, Marex, said: “There is great interest from our clients in going to Dubai. For us, the emirate will become a really important hub, as business moves there with a large number of key players in the growing commodities sector in the region.”
