Course Summary

This four-day course provides delegates with a fundamental understanding of the trading and operational features within the international oil industry - from the selection, purchase, shipment and refining of crude oil through to the subsequent selling of the refined products that meet stringent sales specifications. Emphasis is placed on understanding and successfully resolving the practical issues encountered by professionals within the industry. In addition to formal presentations, delegates will actively participate in exercises and role plays to reinforce their understanding of the topics presented.

What you will Learn:

• How to select, value and subsequently trade crude oil
• How to charter an oil tanker to ship crude oil to the refinery or products to a customer
• How crude oil is refined into finish products
• Significance of quality and product specifications to the product trader
• How to select, value and subsequently trade finished products
• How to write and review contracts
• How to review letters of credit and cargo documents
• How to operate a contract for the sale or purchase of oil from its inception, through delivery to final payment
• How traders identify and lock in the profits of inter-regional arbitrage through hedging

Who Should Attend?

New entrants to the oil industry, existing oil industry personnel within exploration, shipping, refining and marketing sectors who need to increase their understanding of oil trading and operations in the international markets, lawyers, bankers and accountants with oil industry clients, government officials involved in the oil and energy sector and tanker owners and shipping agents.

Course Contents

Fundamentals

• International supply/demand
• The oil markets
• Pricing mechanisms

Crude Oil Valuation and Selection

• Crude oil characterisation
• GPW, netback and refiners margin

Tanker Markets

• Freight and Worldscale
• Tanker characteristics
• Chartering and charter parties

Refining

• Distillation
• Upgrading and conversion processes

Oil Trading

• Crude oil
• Naphtha and gasoline
• Jet fuel and distillate
• Fuel oil and heavy feedstocks
• Understanding long and short positions
• Futures
• Hedging and arbitrage
• Introduction to advanced trading instruments

Product Quality

• Specifications
• Blending
• Component valuation

Oil Contracts

• Preparation and review

Payment and Credit

• Letters of credit
• Banks
• Invoicing

Nominations and Documents

• Vessel nominations
• Documentary instructions
• Bills of lading
• Letters of indemnity

Measurement of Quantity and Quality

• Test methods
• Measurement practices
• Independent inspectors
• Losses

Storage and Stocks

• Stocks and their relevance to the industry
• The nature of storage
• Terminal practices
• Storage agreements