What is Crude Oil?
Crude oil is a naturally occurring fossil fuel made up of a mixture of hydrocarbons — hydrogen and carbon atoms. It exists in liquid form in underground reservoirs in the tiny spaces within sedimentary rocks. Or it can be found near the surface in oil sands. It is often found alongside natural gas and saline water. Crude oil is often interchangeably referred to as petroleum. This is because petroleum includes both the unrefined crude oil as well as refined petroleum products. It is non-renewable once it’s gone it’s gone and cannot be easily replaced. Crude oil will be an indispensable raw material for years to come – mainly for the chemical industry, because it’s too precious to be consumed for heating or as fuel.
CRUDE OIL TRADE PROCESS
- CIF: The seller handles everything from loading the vessel, paying for insurance and shipping the product to the country the buyer wants it delivered.
- FOB: The seller is responsible for handling the transportation of the goods to the port of shipment and loading cost. Once the goods are loaded on the ship, all liabilities transfer to the buyer.
- Tanker Take Over (TTO): The buyer takes over the hiring of a loaded tanker along with the product it contains.
- Tanker To Tanker (TTT): The buyer hires his vessel and uses the same to purchaseproducts from the seller.