Glossary
Every term in physical oil, explained.
ICPO. LOI. MT700. Virgin D2. Written plainly, with the scam flags called out where they belong.
CONTRACTS & DOCUMENTS7
FCOFull Corporate Offer — the hardened version of an SCO, binding on the seller subject to payment instrument issuance.DEFINITION ICPOIrrevocable Corporate Purchase Order — a buyer-side document stating intent to purchase a cargo of oil.DEFINITION IMFPAInternational Master Fee Protection Agreement — formalises broker commission splits on a deal.DEFINITION LOILetter of Intent — a pre-contract document expressing a party's intent to transact under specified terms.DEFINITION NCNDANon-Circumvention Non-Disclosure Agreement — protects broker commissions and counterparty identity.DEFINITION SCOSoft Corporate Offer — a seller-side offer document naming price, volume, and loading logistics.DEFINITION SPASale and Purchase Agreement — the binding contract for an oil cargo.DEFINITION
PAYMENT INSTRUMENTS10
CADCash Against Documents — buyer pays directly on document presentation without an LC.DEFINITION DLCDocumentary Letter of Credit — same as LC, emphasising the document-presentation mechanic.DEFINITION LC (Letter of Credit)Bank undertaking to pay the seller upon presentation of compliant documents.DEFINITION MT700SWIFT message type for issuing a documentary letter of credit.DEFINITION MT760SWIFT message type for issuing a guarantee or standby LC.DEFINITION MT799A free-format SWIFT message often misrepresented as a payment guarantee; a recurring instrument in instrument-fraud schemes.DEFINITION POFProof of Funds — a bank document evidencing a buyer can pay; weaponised in reverse advance-fee schemes.DEFINITION RWAReady, Willing and Able — a short bank letter stating a party is ready to transact; a scam-circuit staple with no settlement weight.DEFINITION SBLCStandby Letter of Credit — a bank guarantee used as a payment backstop.DEFINITION UCP 600The ICC rules governing documentary letters of credit; the standard a presentation is examined against.DEFINITION
PRICING & BENCHMARKS7
ArbitrageBuying product in one market and selling in another where the price net of freight is higher.DEFINITION BrentThe global crude oil benchmark for Atlantic basin, European and African grades.DEFINITION DubaiThe Middle East sour crude benchmark, anchor for most Asia-bound flows.DEFINITION EFS (Brent-Dubai)Exchange of Futures for Swaps — the Brent minus Dubai spread.DEFINITION MOPSMean of Platts Singapore — the Asian benchmark for refined products.DEFINITION PlattsPrice reporting agency (PRA) — S&P Global Platts assesses physical oil prices globally.DEFINITION WTIWest Texas Intermediate — the US crude oil benchmark.DEFINITION
TRADING CONCEPTS6
API gravityA measure of crude oil density relative to water — higher API = lighter crude.DEFINITION EN590The European ultra-low-sulphur diesel (ULSD) specification, widely used as a global benchmark.DEFINITION GasoilA middle distillate, primarily diesel fuel and heating oil, traded against MOPS/Platts benchmarks.DEFINITION HSFO 380High-sulphur fuel oil, 380 centistokes viscosity — a bunker and power-generation fuel.DEFINITION Rotterdam ARAAmsterdam-Rotterdam-Antwerp — the dominant Northwest European refined-products hub.DEFINITION VLSFOVery Low Sulphur Fuel Oil (0.5%) — the IMO 2020-compliant marine bunker standard.DEFINITION
INSPECTION6
Dip-TestA physical measurement of product in a tank or vessel; a genuine 'dip and pay' step, and a faked one in scam procedures.DEFINITION IntertekSecond-largest physical oil inspection firm, major alternative to SGS.DEFINITION Q88Standard vessel questionnaire used by charterers to verify tanker suitability.DEFINITION SayboltA major petroleum inspection and testing company; a 'Saybolt report' is common verification, and a common forgery.DEFINITION SGSSGS — the largest third-party inspection company for physical oil cargoes.DEFINITION Tank Storage Receipt (TSR)A terminal's receipt confirming product is held in a named tank for a title holder; routinely faked as 'proof of product'.DEFINITION
SHIPPING & LOGISTICS11
Bareboat charterA charter where the charterer operates the vessel without crew or management from the owner.DEFINITION Bill of Lading (B/L)The shipping document evidencing receipt of cargo and ownership title.DEFINITION CFRCost and Freight — seller pays cost and freight to the discharge port; risk passes at load port.DEFINITION CharterpartyThe contract between shipowner and charterer for the use of a vessel.DEFINITION CIFCost, Insurance, and Freight — seller pays freight + marine insurance; risk still passes at load port.DEFINITION DemurrageThe penalty paid by the charterer when loading/discharging takes longer than allowed laytime.DEFINITION FOBFree On Board — seller delivers at load port; buyer bears freight and insurance from that point.DEFINITION IncotermsStandardised international commerce terms published by the ICC, defining risk/cost split.DEFINITION LaycanLoading and cancelling dates — the window within which a vessel must arrive at the load port.DEFINITION LaytimeThe time allowed under the charterparty for loading and discharging cargo.DEFINITION NORNotice of Readiness — the master's declaration that a vessel is ready to load or discharge.DEFINITION
REGULATORY BODIES13
BPCBangladesh Petroleum Corporation — sole authorised crude importer in Bangladesh.DEFINITION EPRAKenya's Energy and Petroleum Regulatory Authority — licenses refined-product importers.DEFINITION EWURATanzania's Energy and Water Utilities Regulatory Authority.DEFINITION FATF Recommendation 10The global customer due diligence standard underpinning KYC and beneficial-ownership checks.DEFINITION FCA SYSCThe UK regulator's Senior Management Arrangements, Systems and Controls sourcebook (incl. financial-crime controls).DEFINITION FinCENThe US Financial Crimes Enforcement Network; receives SARs and administers Bank Secrecy Act reporting.DEFINITION IMO 2020The International Maritime Organization's 2020 rule capping marine fuel sulphur at 0.5%.DEFINITION KYCKnow Your Customer — the due-diligence process used to verify counterparty identity and risk.DEFINITION MAS Notice 626Singapore's AML/CFT notice for banks, setting customer due diligence and screening obligations.DEFINITION OFACUS Office of Foreign Assets Control — administers and enforces US economic and trade sanctions.DEFINITION OFSIThe UK's Office of Financial Sanctions Implementation; administers and enforces UK financial sanctions.DEFINITION OGRAPakistan's Oil and Gas Regulatory Authority — licenses all petroleum imports and marketing.DEFINITION UN Consolidated ListThe UN Security Council's consolidated sanctions list — binding on all UN member states.DEFINITION
SCAM PATTERNS8
Advance-Fee FraudThe core trade-fraud typology — extracting upfront fees for a cargo or instrument that never materialises.DEFINITION BCLBank Comfort Letter — a vague 'comfort' letter with no payment obligation; a credibility prop in scam procedures.DEFINITION BG/SBLC MonetizationBank-instrument 'monetization' — a financial-instrument fraud frequently bundled into oil-deal pitches.DEFINITION Dutch-style procedureA fake procurement process used by oil-trade scammers to create the illusion of a Rotterdam-based deal.DEFINITION Mandate ChainA 'layer cake' of self-described mandates and intermediaries inserted between a buyer and a non-existent seller.DEFINITION POPProof of Product — a document or video a seller offers to evidence a cargo exists; routinely faked in advance-fee schemes.DEFINITION Tank-to-Vessel (TTV)A real loading operation whose upfront 'injection' fees are a common advance-fee scam hook.DEFINITION Virgin D2 scamA long-running scam offering 'virgin' D2 diesel (EN590) at impossibly low prices via fake Russian procedures.DEFINITION