December 2025 Federico Baker
2026 Oil Trading Market and Compensation Outlook
Oil trading in 2025 was shaped by shifting hiring trends and changing market behavior, and there are no signs of that slowing in 2026. Firms are increasingly prioritizing traders who combine strong commercial instincts with technical fluency as margins tighten and global flows shift. Trading desks that invest early in senior talent, build hybrid skill sets, and put strong AI governance in place will be best positioned to outperform in 2026.
Market conditions and trading behavior in 2025
2025 brought another year of sharp price swings. OPEC+ adjusted production quotas several times, and tensions in the Middle East pushed Brent prices higher than Dubai crude. This widened the Brent to Dubai spread to more than USD 4. The wider spread created clear arbitrage opportunities for crude and product traders, especially those who understand flow economics and act quickly. Teams with slow or rigid processes struggled to keep up.
Demand patterns also shifted. Europe continued to soften, reducing product clarity and weakening refinery margins. Asia strengthened and pulled more barrels east. This forced traders to rethink freight, storage, and financing strategies. The strongest-performing desks had broad global reach and the ability to operate across multiple product chains.
Geopolitics created short bursts of volatility. Sanctions, outages, and shipping disruptions triggered fast price moves that rewarded traders who rely on fundamentals rather than single-signal decision making. Many firms reviewed their risk controls and moved toward integrated desk structures. Combining crude, products, LNG, and biofuels allowed desks to make faster decisions and capture more margin across the barrel.
Hiring trends reflected intense competition for senior traders with proven P&L. Guaranteed packages rose by roughly 15% to 20%, and counteroffers became routine. Specialists in arbitrage and blending gained the most leverage because their strategies delivered consistent returns throughout the year. Junior hiring narrowed, with a clear preference for graduates with coding and analytics skills.
Loyalty weakened as traders moved more frequently in search of broader mandates, stronger guarantees, and greater flexibility. Federico Baker, Associate Vice President at Selby Jennings, explains further:
The market keeps paying for skills it failed to build. When firms underinvest in development, they pay twice. First through rising guarantees, and then through higher churn when traders move for better progression. Many firms are learning that retention starts with capability, not compensation.
Key points from 2025
- Traders with wide product coverage delivered stronger results
- Technical capability separated stable desks from weaker ones
- Churn increased as guarantees rose
- Integrated desk structures continued to gain traction
Strategic drivers for firms in 2026
Price forecasts for 2026 sit at lower levels, with WTI expected in the 49 to 57 USD range. This points to tighter margins and fewer natural profit opportunities. Firms will depend on traders who can interpret structure, manage uncertainty, and operate across several product chains.
Hiring senior traders early will remain a priority. The pool of proven crude and product arbitrage specialists is small and most already sit in high-performing teams. Firms that delay until late Q1 will face limited supply and higher salary expectations.
Pipeline development will matter more than ever. Graduate programmes are shifting toward hybrid roles that combine commercial instinct with coding, analytics, and risk modelling. Lateral hiring cannot meet these needs at scale. Pipelines also help firms retain talent by offering clearer career paths and wider development routes.
AI governance is becoming essential. Models influence scheduling, exposure decisions, and optimisation, and regulators want clean documentation around them. Traders need to understand how these models work, where they fall short, and how to challenge outputs. Federico made the point clear:
AI will not replace traders, but it will expose the ones who never understood their own risk. The traders who thrive will be the ones who know when to trust the model, when to push back, and how to explain their decisions. Firms that treat AI as a shortcut rather than a tool will fall behind fast.
Retention will sit at the center of performance. Traders want broader mandates, clear progression, and access to product areas that interest them. Firms that rely only on salary or brand reputation will lose staff. Multi year guarantees and structured sign on packages will remain part of the retention approach.
Mandates will continue to widen. Biofuels, carbon credits, and LNG will take up a larger share of P and L as regulation and demand shift across markets. Traders who understand these areas will move faster than those who stay focused only on crude.
Focus areas for firms
- Secure senior hires early
- Build hybrid graduate programs
- Strengthen AI documentation and oversight
- Expand product coverage
- Use career progression as a retention lever
Skill development and mobility requirements
Technical fluency now sits at the core of trading roles. Python, SQL, and risk tools are becoming standard. Traders who cannot work directly with data lose speed and depend on others for insight. Firms want tighter workflows with fewer handoffs.
Mandate breadth supports mobility and career stability. Traders who understand crude, products, biofuels, and carbon can move across desks and adapt as markets shift. Integrated teams value this flexibility.
Geographic mobility remains a major lever.
- London, Geneva, and Dubai continue to dominate global oil trading
- Singapore is rising quickly due to strong demand growth across Asia
AI literacy matters at all seniority levels. Traders need to understand how models behave, how signals affect exposure, and how to challenge flawed outputs. This is not about advanced engineering. It is about judgment, logic, and risk awareness.
Skills gaining the most value
- Coding fundamentals
- Cross product knowledge
- Data interpretation
- Risk modeling
- Global flow understanding
How AI will reshape trading roles in 2026
AI will handle routine hedging, scheduling, and optimization. Execution only roles will shrink as firms expect traders to operate at a strategic level, not simply book trades. Automation will raise efficiency but cannot replace judgment across logistics, geopolitics, or refinery behavior.
Hybrid profiles will continue to grow. These traders combine physical market insight, data skills, and algorithmic thinking. They align with how modern trading teams operate and often progress faster because they add value across multiple areas.
Model oversight roles will expand. These positions test model behavior, validate signals, and support compliance. They sit between trading, risk, and technology teams.
Human judgment remains essential. AI adds speed and scale but cannot replace commercial instinct. Federico summarized the shift clearly.
AI lifts the floor and raises the ceiling. It raises the baseline for the whole desk, but it also widens the gap between the traders who rely on instinct and the traders who understand how to turn data into decisions. The future belongs to those who can do both.
AI-driven changes
- Less routine execution work
- Growth in hybrid trading roles
- More oversight roles focused on model integrity
- Higher emphasis on strategic judgment
Compensation outlook for 2026
Years of service
- 5 to 7 years - 150,000 to 200,000
- 7 to 10 years - 180,000 to 250,000
- 10 to 15 years - 225,000 to 300,000
- 15+ years - 275,000 to 350,000
- Head of Trading - 350,000+
Years of service
- 5 to 7 years - £125,000 to £175,000
- 7 to 10 years - £150,000 to £200,000
- 10 to 15 years - £175,000 to £250,000
- 15+ years - £225,000 to £300,000
- Head of Trading - £300,000+
Years of service
- 5 to 7 years - €110,000 to €160,000
- 7 to 10 years - €140,000 to €190,000
- 10 to 15 years - €175,000 to €225,000
- 15+ years - €200,000 to €250,000
- Head of Trading - €250,000+
Bonuses remain highly variable
- Discretionary structures are still common, but not competitive.
- Multipliers often range from 50% to 500%.
- P&L linked bonuses usually sit between 8% and 15%.
- Senior leaders often reach 1 to 5 million EUR total compensation with stock or equity.
Risks shaping the year ahead
Margin compression will reduce natural trading opportunities and increase pressure on team structure and design. ESG and AI regulation will intensify, raising the need for clear controls and strong documentation. The market will continue to face a shortage of hybrid commercial and technical traders. Firms that delay upgrades to training, governance, and mandate flexibility risk losing talent to desks that adapt faster.
Selby Jennings supports firms through these shifts by helping them secure senior hires early, build hybrid talent pipelines, and structure hiring strategies that reflect current market conditions. Our team tracks compensation, skill trends, and mobility patterns across all major trading hubs, helping clients make informed hiring decisions.
If you are building your trading team or planning senior hires for 2026, request a call back and a specialist consultant will follow up directly.
