Commodity traders now cozy up to Trump

For decades, the world’s biggest have sought to remain outside of politics, doing deals with anyone who has natural resources to buy or sell. Now, is changing the rules of the game.

The has plunged into commodity dealmaking in recent months, awarding a series of contracts or partnerships with the potential to be hugely lucrative for the involved. The shift means that proximity to the White House is becoming increasingly essential for the handful of typically low-profile trading houses that control the flow of natural resources around the world – and is forcing the industry into some uncomfortable political choices.

In the past six months, top executives from three large oil and metals traders have attended publicly documented meetings with the president at the White House – more than the total for the prior 25 years. Some major players have taken steps to quietly unpick key relationships with Chinese entities, which could attract negative attention from the US. One of the world’s largest even overhauled its ownership and leadership after the US Treasury described it as a “puppet” of the Kremlin.

The US government’s more muscular role in the resources sector is likely to loom large this week as commodity executives and financiers gather in Lausanne, Switzerland, for the industry’s main annual conference, the FT Commodities Global Summit.

For generations, the commodity traders stuck to the principle that their business should be apolitical, striking deals just as happily in capitalist America and communist China, apartheid South Africa or Vladimir Putin’s Russia. As Marc Rich, the industry’s godfather and founder of the company that is today Glencore Plc, told a journalist in 1992: “In our business we’re not political. We never have been.”

To be sure, it’s nothing new for the trading houses to do deals with governments or to be photographed meeting leaders of countries. But never before in modern history has the US government been such an important player in the commodities industry.

Whether it’s dealings with China, tariffs, or military action in major oil producers, a number of Trump’s key policies connect to natural resources and have seen everything from oil to soybean deals pushed to the front of the US national interest.

That’s meant a growing on the clutch of largely privately-held trading houses that dominate markets for agriculture, metals and energy.

When the US needed oil to be lifted quickly out of Venezuela in the wake of a military operation to replace the country’s president, it called on Vitol Group and Trafigura Group to help. For its $12 billion national stockpile of critical metals, it has brought in Mercuria Energy Group, Traxys and Hartree Partners to source them.