GSS Academy
OIL TRADING TERMINOLOGY, IN PLAIN LANGUAGE
Most bad petroleum deals succeed because someone was too embarrassed to ask what a term meant. Here is the vocabulary, without the mystique.
Glossary
CORE DEAL DOCUMENTS & TERMS
SCO - Soft Corporate Offer
A non-binding indication of terms from a seller. It signals interest and shape; it is not a contract and it is not proof that product exists.
ICPO - Irrevocable Corporate Purchase Order
A buyer's formal expression of intent to purchase on stated terms. Common in this market, but its weight depends entirely on the buyer behind it.
LOI - Letter of Intent
A buyer-side statement of intent, usually preceding an ICPO. Non-binding on commercial terms in most petroleum usage.
SPA - Sale and Purchase Agreement
The binding contract. Everything before this is preparation; everything in this document is what actually governs the transaction.
NCNDA - Non-Circumvention, Non-Disclosure Agreement
Protects intermediaries from being cut out of a chain they introduced. Its practical value depends on jurisdiction, drafting and enforceability.
IMFPA - Irrevocable Master Fee Protection Agreement
Documents how and to whom commission is paid. Should be agreed before an introduction, not after a deal is already moving.
FOB vs CIF
FOB places cost and risk with the buyer once product is loaded. CIF means the seller arranges carriage and insurance to the destination port. The incoterm changes who owns which risk and when.
Proof of Product
Documentation intended to evidence that product exists and is available. It is also one of the most commonly forged categories of document in this market - treat it as a claim to verify, not a fact.
Tank Receipt / TSR
A storage-facility document indicating product held in tank. Verify directly with the named facility; do not accept a PDF as verification.
Dip Test / Inspection
Independent measurement and quality verification, typically by an inspection company. Who appoints and pays the inspector matters as much as the report.
This material is general education only. It is not legal, financial, sanctions, tax or compliance advice, and it does not describe any specific transaction. Always take independent professional advice on the documents you are asked to sign.