Buying
Procedures
Correct end-to-end sequences for purchasing bulk commodities. Based on procedures used by legitimate refineries, NOCs, and Tier-1 trading houses. Select a commodity below to view its specific buying process.
Golden Rule: In legitimate commodity trading, payment moves against documents — never against a dip test, a photograph, a screenshot of a tank, or a promise of title transfer after the wire goes out.
MARKET STRUCTURE
Crude oil is sold either on long-term term contracts directly from national oil companies (Saudi Aramco, ADNOC, KPC, NNPC, Sonangol, Petrobras) or on the spot market via a Tier-1 trading house. Term lifters receive monthly allocations priced against the producer's Official Selling Price (OSP), benchmarked regionally.
END-TO-END PROCEDURE
Buyer Qualification
Letter of Intent (LOI)
Recap
Sale & Purchase Agreement (SPA)
Documentary Letter of Credit
Vessel Nomination
Loading & Inspection
Bill of Lading Issued
Document Presentation & Payment
Discharge
PRICING BENCHMARKS
CRITICAL CHECKS
Pricing must reference a published benchmark — refuse fixed-discount offers not within market spreads (typically ±a few dollars per barrel).
Payment must be LC against documents — never MT103 in advance.
Title passes at the loading flange (FOB) or discharge flange (CFR/CIF), evidenced by the Bill of Lading — not by a dip test or photo.
There is no ICPO / POP cascade with real NOCs or majors. That language, along with unsolicited "FCO" offers, is a broker-chain signal — a genuine seller responds with a Recap, not an FCO.
Vessel must be agreed in writing before NOR is tendered; SIRE 2.0 vetting failures at the jetty are a frequent cause of dispute.
Ready to initiate a trade? Contact our team to discuss your requirements.
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