Energy traders face growing risk visibility challenges: 2025 research insights

Energy and commodity traders may be risking more than they realize. Our research reveals that portfolio risk visibility is suffering from inflexible models and systems that struggle to adapt to changing market conditions.

We commissioned a research study of energy and commodity traders in North America and Europe that collectively trade $1.4 trillion in assets. While most respondents believe they have good visibility into their trading risks, the data suggests visibility has actually deteriorated for many firms over the past few years.

Mixed confidence despite growing challenges

Most respondents report confidence in their risk visibility capabilities. Only 2% of respondents described visibility of their risks as “fairly poor”, while 35% described it as being “adequate”. The majority (57%) referred to their visibility as “good”, and only 6% rated it as being “excellent”.

However, these assessments don’t tell the full story. One in five (21%) respondents reported worsening risk visibility over the past two years, while 43% saw no change  and 36% noted improvements (27% improvement, 9% significant improvement).

For those reporting declining visibility, the leading cause cited was an inability to modify or customize pricing models and risk analytics, followed by difficulty adapting to rapidly changing market conditions and volatility.

Top six reasons cited for deterioration in risk visibility:

Among respondents who saw an improvement in risk visibility, the leading driver was technology that enables closer alignment between data scientists and portfolio managers, allowing faster and more effective evaluation and adaptation of investment strategies. Other factors include a shift away from monolithic front-to-back systems toward more flexible, best-of-breed or open-source solutions and increased use of third-party specialists in risk analytics and data management.

Top six reasons cited for improvement in risk visibility

As markets grow more volatile and trading strategies become more complex, risk visibility is becoming a competitive necessity. Firms with outdated technology risk being blindsided by exposures they can’t properly assess.

Traders with superior technology gain clear advantages: better model transparency, real-time risk monitoring, and faster decision-making. In today’s markets, these capabilities directly impact fund performance, not just compliance.

About this research

Beacon by CWAN commissioned independent research company Pure Profile to interview 100 senior energy and commodity traders at specialist trading firms, hedge funds, fund managers and investment banks responsible for total capital allocated or assets under management for trading of $1.4 trillion. Respondents were based in the US, UK, Europe and Canada. The research was conducted during March 2025 using an online methodology.