Gennady Timchenko: Gunvor’s founder changed oil trading

Logistics and infrastructures. Gennady Timchenko’s motto over the years has been to improve logistics and infrastructures. The only way to do business for a “niche player” who wants to buy and sell competitive oil.

When Timchenko founded the independent oil trading company Gunvor, more than a decade ago, oil trading was a business only Majors could afford to get involved in.

Oil majors were essentially controlling the entire logistics systems in the trade and did not have to fear the rise of competitors. Neither did they have to work on improving logistics to bring cheaper oil to markets.

From Perestroika to Geneva

Gennady Timchenko’s oil trading career started at the dawn of the Soviet era when Mikhail Gorbachev’s Perestroika was in place.

This was a period of liberalization for Russia’s economy, during which Timchenko, who was working for the government at the time, was asked to build the first ever oil export routes from Russia to Western Europe. Railway, pipelines, port facilities,… Timchenko’s team conceived the first infrastructures meant to export Russian oil.

This experience gave Timchenko in-depth know-how and expertise of Russian oil trading infrastructures and bottlenecks.

He created Gunvor in 1997 based on his insight: Russia’s oil was not competitive on an international scale because of the weakness of Soviet-inherited infrastructures.

Better logistics to sell competitive oil to Western markets

Gennady Timchenko, along with his business partner Torbjorn Tornqvist, understood the cause of Russia’s bottlenecks. So they massively invested in infrastructures.

Gunvor notably built its own railway company, several port facilities, and its own oil tanker fleet.

These investments allowed Gunvor to buy oil cheaper than their competitors and to sell it at attractive prices. This meant they became a highly reliable and competitive player in the market.

More than ten years after its creation the company has widely broadened its range of activities with offices and operations across the world. Gunvor is also active in the global energy trading market, including power, gas and renewables.