Kalily E. P.

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Fraudsters & Co.

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Trading Basics and other Stuff
Real Petroleum Buyer vs. Fake Buyer - How to Identify Them


Buyers insisting on their banking procedures.

Every veteran buyer knows that the petroleum trading business is the Seller's call. They know that no matter how much money they have in their bank, it is useless unless a seller is willing to sell. Every seller has a procedure that he/she wants followed, to protect his business and guarantee a fair treatment of Buyer and Seller. A serious buyer will put up the required Bank Comfort Letter or cheap Pre-Advice, knowing that there is nothing to lose should the supplier default on his/her commitment.

Buyers not willing to issue a BCL/RWA letter.

The most important document for us is the BCL/RWA letter from Buyer's bank. Without this BCL/RWA letter we will not proceed as this is the key to make sure that the Buyer has the funds and is ready, willing and able to proceed with the deal.

Delayed compliance with documentation requirements.
Every new or fake buyer or intermediary will cause a great delay in complying with procedures. Frequently this is because the buyer does not have real, available funding as he/she claims to have in the beginning. Those who have no word of honor will never close a deal in this trust-controlled business. The contract always goes to the buyer who complies without making it difficult for the seller.

There is a large fishing market of brokers (95%)

Especially when they ask for the Dip and Pay it’s exactly the profile of Brokers and not the real buyers.  It means they need POP first to go on market chasing buyers. A real buyer has no problem to issue an MT799 or MT999 or any other bank Instrument as SBLC or BG upfront to a real seller.

We do not issue a Performance Bond.

It’s again a request of brokers and USA Traders to make it difficult for other partners involved and reduce the number of Traders to control the market from the Majors. No refinery is going to prepare 100,000 MT of oil in tanks without a bank instrument issued and confirmed by his bank. If buyer feels uncomfortable with the seller, he can ask for trial of small shipment to verify the seller performance. If buyer argues by saying it costs money to issue bank instruments then he is not a buyer.

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