How Can Energy and Commodities Firms Plan for the Unplannable?
As energy and commodities firms enter business planning season, leadership teams need to navigate an unpredictable environment.
In this briefing, Enco Insights’ Executive Director, Paul Chapman speaks to veteran trading leader and Enco Insight Partner, Savvas Manouos, about planning challenges and steps companies can take to capture opportunity in uncertainty.
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Enco Insights, London - 26 September 2025
This Q&A on business planning in energy and commodities explores challenges including:
How can leadership maintain strategic consistency during lean years?
How can firms avoid strategy based on short-term performance?
How should organisations rethink benchmarks and build resilience into planning?
How do leaders unlock the collective knowledge within the organisation to develop strategic and performance resilience?
Paul Chapman: In a world that’s changing so rapidly—policies, economics, geopolitics—how is strategy different from the traditional annual planning cycle in energy and commodities?
Savvas Manousos: The world today is Volatile, Uncertain, Complex and Ambiguous (VUCA), yet many companies still plan as if last year’s strategy will politely carry forward. Traditional budgeting and static strategies no longer align with the pace of shocks we face—geopolitical, economic, logistics, tariffs, and climate. In just the past two years, we’ve seen shipping lanes open and close due to conflict; tariffs appear and change, and the Panama Canal has been disrupted by weather.
This creates “strategy whiplash”—where last year’s plan becomes this year’s blind spot. That is why I advise firms to “replace rituals with readiness”. Companies need to move from annual, ritualised planning to agile, rolling approaches: managing business portfolios and options rather than line-item budgets, and using tools like war games and red teams to dynamically stress-test strategies.
Paul: How does annual budgeting influence or constrain strategic planning in energy and commodities companies?
Savvas: Strategy starts with fundamentals—what are the forces that drive your business and define where you can win? These typically include:
Global GDP—headwind or tailwind
Demand for your products or services
Competitive intensity
Margins, both unit margins and the variable costs that impact them
CapEx requirements for long-term through-cycle sustainability
Shareholder needs for returns and dividends
The challenge is avoiding anchoring too early to financial outcomes. Annual budgeting often becomes an extrapolation of the past: last year’s results plus a stretch target. Real course correction usually only happens in a crisis—no dividend, no free cash flow, or a loss-making year—when leaders can no longer hide behind the environment.
Instead, organisations need to build resilience and curiosity, with resources that can be flexibly redeployed rather than trapped in silos. This is difficult for large companies with command-and-control-like structures, but it is essential in today’s environment.
“Companies need to move from annual, ritualised planning to agile, rolling approaches: managing business portfolios and options rather than line-item budgets, and using tools like war games and red teams to dynamically stress test strategies.”
Paul: Given the cyclical nature of commodities markets, how can leadership maintain strategic consistency during lean years?
Savvas: Commodity markets are inherently cyclical. If you look at ags houses over the past 15 years, the pattern is clear: four years of lean results or losses, one- or two-years stabilising, and then four years of strong results.
The leadership challenge is that during lean years, pressure mounts to pivot into manufacturing or value-added businesses. When markets rebound, shareholders demand a return to trading. That kind of oscillation undermines strategy.
The horizon matters. Too many listed firms “reset” strategic and budget elements every quarter based on results or peer performance. Instead, leaders need to articulate and hold to the core elements of strategy—their right to win. This could be:
Lowest-cost production
Sustainable geographic advantage
Technology leadership
Differentiated asset flexibility and upper quartile Net Cash Margins
If you cannot identify your right to win, question whether you should own that activity at all. A simple test is to ask: if a competitor owned this asset, would they make more money than we do? If yes, you either need to catch up or reconsider ownership.
Savvas Manousos is an executive with over thirty-five years of international experience in energy trading, strategy development, and portfolio management, gained across global organisations such as BP, Reliance Industries, Maersk, and CEPSA (now Moeve).
Paul: Relatedly, in commodity trading, where results can swing with volatility - how can energy and commodities firms avoid misjudging strategy based on short-term performance?
Savvas: Quarterly numbers give signals, but longer horizons are needed to strip out noise. The problem is too many organisations lock themselves into 12-month strategies and revisit them only annually. Instead, use rolling forecasts and dashboards, much like an aircraft’s control panel, to monitor key areas and adjust course regularly, while still travelling to the strategic destination.
Commodity markets don’t deliver linear performance, so expecting 1/12th of the plan each month is misguided. The right question is: did we get the best return on risk, given the conditions? Delivering $200 million doesn’t mean failure if the $1 billion target was never realistic in the given environment.
Finance tools should be used to stress-test assumptions, not to punish teams. Leaders must distinguish between underperformance caused by flawed assumptions, wrong market calls, or inflated costs, versus outcomes that were simply the best achievable in volatile conditions.
Larger cross-commodity houses manage this better, as different portfolios offset one another. The real danger is cutting underperforming desks too quickly – which can be analogous to driving by only looking in the rear-view mirror. Over time, this salami-slicing leaves you with a perfectly formed but tiny diamond, rather than a rougher, diversified portfolio that is more resilient.
Three practices can help planning in energy and commodities companies here:
Form cross-functional resilience cells—including trading, logistics, treasury, legal, operations, and market analysis—with decision rights to act quickly.
Replace static budgets with rolling forecasts and an “options hopper”—three to five times more initiatives than you can fund, ready to deploy as conditions evolve.
Run war games or red teams quarterly to stress-test strategies. Red teams help companies role-play competitors, governments, or other market forces. In commodities, this can be very specific – steps such as identifying key contracts, setting inventory management rules or testing long-term asset positions.
Paul: How can energy and commodities firms embed external perspectives like advisory boards and services like advisory networks into regular cycles?
Savvas: Boards often act as checks and balances. What really helps organisations is when external advisors help teams co-create breakthrough solutions that fit company DNA and market realities. Resilience, like fitness, is built, not bought. Advisors and coaches can accelerate learning, but solutions must ultimately be owned by the teams themselves.
Speaking personally, my role with Enco Insight Partners is as a thought partner, not to deliver a pre-baked slide deck. I think the value of advisors like me is in connecting the internal “big brain”—traders, refiners, finance, risk, legal—into a single conversation.
Paul: How can energy and commodities firms maintain accountability when building flexibility and optionality into planning?
Savvas: The key is shifting to an ownership mindset. Traders will always argue for bonuses or CapEx, but if everyone is a partner in the business, aligned for five to ten years rather than five to ten quarters, accountability changes.
Budgets should reward enterprise behaviour—for instance, supporting a cross-functional project that benefits the whole enterprise rather than just a single desk. Failures, whether operational or credit-related, become collective challenges to solve.
The problem with most organisations is fragmentation: regional, functional, or desk-level targets that create zero-sum outcomes, or even worse, value leakage. Resilient organisations act as one team, much like successful sports teams do—winning collectively rather than individually.
Paul: Uncertainty can lead to inaction. Looking ahead, how should energy and commodities organisations avoid the risk of paralysis?
Savvas: If you have capital, measure yourself against the risk-free alternative. If government bonds yield 3–4%, your business must deliver more. Sitting on cash while competitors consistently generate 9–10% will quickly show up as underperformance.
Rolling forecasts tied to strategic themes, not just numbers, are essential. Pre-approved options budgets allow cross-functional resilience teams to deploy capital once thresholds are met. Don’t wait for perfect timing—rarely achievable in volatile markets.
Examples include lease commitments, freight book plays, term contracts, or hedges. This kind of agility can appear chaotic, but is in fact agility – rather than rigidity. Strategy remains the broad compass, while teams act within defined bands.
Overall, organisations need to shift from fixed annual budgets to rolling forecasts, from single commitments to option pools, and from centralised decisions to devolved, cross-functional teams.
How can Enco Insight Partners help?
We connect seasoned industry practitioners with senior executives and leaders from across the energy and commodities markets globally. Engagements can range from a one-day session to a longer-term interim position.