BRENT104.20-0.20|WTI99.49-0.44|DUBAI102.20|BR-WTI4.71|BR-DB2.00|USD/PKR280.10|USD/AED3.67|
Glossary
Every term in physical oil, explained.
ICPO. LOI. MT700. Virgin D2. Written plainly, with the scam flags called out where they belong.
CONTRACTS & DOCUMENTS
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 INSTRUMENTS
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 SBLCStandby Letter of Credit — a bank guarantee used as a payment backstop.DEFINITION
PRICING & BENCHMARKS
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 CONCEPTS
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
INSPECTION
SHIPPING & LOGISTICS
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 BODIES
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 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 OFACUS Office of Foreign Assets Control — administers and enforces US economic and trade 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