Oil trading glossary
The documents, payment instruments and shipping terms you'll meet in every bulk petroleum transaction — defined in plain English, with links to where each fits in the procedure.
Transaction documents
ICPO — Irrevocable Corporate Purchase Order
The buyer's formal, binding statement of intent to purchase, issued on company letterhead with product, quantity, delivery terms, company registration details and banking references. It opens every transaction — step 1 of the trading procedure.
SCO — Soft Corporate Offer
The seller's indicative response to an ICPO: product specification, available quantity, gross price basis and procedure. "Soft" means not yet contractually binding.
FCO — Full Corporate Offer
The firm, complete offer issued once the buyer accepts the SCO structure. Countersigned by the buyer, it fixes the commercial terms that will be written into the contract.
SPA — Sales & Purchase Agreement
The binding contract: quantities, laycans, price, payment instrument, inspection regime and remedies. Both parties sign and lodge it with their banks.
POP — Proof of Product
Documentary evidence that the seller holds the goods — tank receipts, quality certificates, allocation title — presented bank-to-bank against the buyer's payment instrument, never informally.
NCNDA & IMFPA
The Non-Circumvention, Non-Disclosure Agreement protects intermediaries from being cut out of a transaction chain; the Irrevocable Master Fee Protection Agreement fixes their commissions, payable at closing. Both are standard where mandates and brokers are involved.
Payment instruments
DLC — Documentary Letter of Credit
A bank instrument that pays the seller when conforming shipping documents are presented. The workhorse of documentary trade — the buyer's bank guarantees payment against paper, not promises.
SBLC — Standby Letter of Credit
A bank guarantee drawn only if the buyer fails to pay by the agreed method. It stands behind the transaction rather than being the payment channel itself.
MT103
The SWIFT message type for a direct customer credit transfer — in trade terms, a documented, bank-verifiable wire payment.
Delivery & shipping
CIF — Cost, Insurance and Freight
The seller charters the vessel and insures the cargo to the named discharge port. Full comparison: CIF vs FOB.
FOB — Free On Board
The seller delivers the product on board the buyer's nominated vessel at the loading port; freight, insurance and voyage risk are then the buyer's.
ASWP — Any Safe World Port
Seen in CIF offers: the seller will quote delivery to any port that can safely berth the nominated vessel size. Draft and berth limits still apply — "any safe" is the operative phrase.
Laycan
The layday/cancelling window — the agreed period in which the vessel must arrive to load. Missing it exposes the responsible party to cancellation or demurrage.
Demurrage
Compensation payable when loading or discharge takes longer than the laytime agreed in the charter party — the meter that runs when a berth or cargo isn't ready.
Inspection & pricing
SGS / CIQ — cargo inspection
SGS (Société Générale de Surveillance) is the leading independent inspector certifying quantity and quality at loading; CIQ is the Chinese inspection regime serving the same role for China-bound cargoes. Every PetroGlobal lifting carries one or the other at the seller's expense.
Gross vs net price
The gross price is before agreed discounts and intermediary commissions; the net price is what remains after. Our published indications are gross — the discount and commission structure is fixed in the FCO. See current numbers on the price indications page.
MT & BBL — trade units
MT is the metric ton (1,000 kg); BBL the oil barrel (42 US gallons, ~159 litres). Products trade in the unit conventional to their market — refined fuels per MT, crude and jet per BBL, D6 per gallon.
Related guides
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