In January, as a mysterious illness ripped through the Chinese city of Wuhan, global oil prices plunged. Two thousand miles away in the island state of Singapore, one of the most powerful men in the world of commodities trading, Lim Oon Kuin, quietly added to his vast stockpiles of fuel – making a bet that China would successfully control the spread of the new disease.

That gamble soured quickly. While China did curb the coronavirus at home, the pandemic that followed brought crude oil prices tumbling as much as 70%. Banks tried to recover loans from Lim’s company, Hin Leong Trading Pte, triggering one of the biggest scandals in the oil industry this century. Lim’s empire collapsed, owing US$3.5 billion ($4.63 billion) to 23 banks, and the fallout from the debacle is still reverberating into 2021, shaking out large tracts of the vast and often opaque US$4 trillion global oil-trading industry.

The losers are likely to be the hundreds of small trading firms, many of them employing only a handful of people, who will find it expensive, if not impossible, to meet the increased demands for information from banks that have become wary of lending them money. Those gaining from the crisis are the big global trading houses such as Trafigura Group and Vitol SA, that retain the confidence of the finance companies and are better able to absorb the costs of increased oversight.

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