eFinancialCareers

Regulations affecting oil trading in London could mean more traders flee to the Dubai market, injecting fresh stock into the region’s talent pool.

The US regulator is threatening to impose new rules on the UK oil trading market, leading some to predict a mass exodus of traders to the Middle East.

Phil Flynn, a trader at Alaron Trading in Chicago, told The Times that over-regulation risks driving the market offshore: “The risk right now is that if you over-regulate you are going to drive the trade overseas to Dubai.”

If the new rules come to pass they will be another boost to the emirate’s oil trading ambitions after the Dubai Gold & Commodities Exchange established an oil futures trading platform in May (Market Watch).

Traders already in short supply

Recruiters say oil traders are already a little thin on the ground in the Middle East.

“The local talent pool is too thin currently, but we have witnessed recruitment activity from both Europe and the Far East into the Middle East,” says Jakob Bloch, managing director of Commodities Appointments.

Damien Stewart, head of Middle East and Asia for commodities recruiter Human Capital, says there’s not yet a big demand for oil traders in Dubai and it’s “too early to tell” if more traders will be packing their bags for the GCC.

He adds: “Most of the world’s trading talent sits in the US and Europe, and increasingly Singapore. Therefore, if the region becomes the next oil trading hub, much of the talent there will no doubt move from western countries as opposed to the local market.”

Stewart reckons an oil trader in the GCC can earn as much as a typical flow trader in Europe, as most of the trading is done through hedging rather than speculation, as is the case in western markets.