Orienta Insights | Issue 01 | March 2026

Governance Risks in Energy and Commodity Trading

Context

Energy and commodity markets are experiencing heightened volatility driven by geopolitical tensions and uncertainty around global supply.

Disruption risks in the Middle East, including potential impacts on energy infrastructure and shipping routes, have contributed to sharp price movements across oil, gas and power markets.

For trading businesses these conditions create significant commercial opportunity. Rapid price movements and wider spreads can generate substantial trading margins.

However periods of volatility also increase the risk of misconduct.

When profit opportunities expand, the incentives on trading desks change. Traders may be encouraged — implicitly or explicitly — to push the boundaries of acceptable market behaviour.

Against that backdrop, firms should consider whether their governance frameworks and culture are robust enough to manage market conduct risk during periods of heightened volatility.

VOLATILITY

Three Governance Questions for Trading Firms During Volatile Markets

Incentives on Trading Desks

Periods of market volatility can significantly increase trading revenues and, in many organisations, trader compensation.

These dynamics can encourage more aggressive trading strategies and decisions taken under significant time pressure.

Clear expectations around trading conduct become particularly important when incentives are amplified.

Market Conduct Risk in Volatile Markets

Energy and commodity markets include trading behaviours that can attract regulatory scrutiny, particularly where activity may influence price formation.

Periods of volatility can increase incentives to trade around benchmark pricing windows, settlement prices and thinly traded markets.

Firms need to ensure traders clearly understand the boundaries between legitimate trading activity and behaviour that may create market manipulation risk.

Governance and Culture Under Pressure

Volatile markets often reveal whether governance frameworks are strong enough to operate under stress.

Firms should consider whether they have sufficient oversight of trading behaviour during volatile markets, clear escalation pathways for unusual activity and a culture that reinforces responsible trading conduct.

Orienta Advisory supports trading businesses with regulatory strategy and governance frameworks for managing market conduct risk in complex and volatile markets.