Crude oil is a commodity traded on the major world stock exchanges and the demand for crude, many times, surpasses the supply. As a result of this, it has become increasingly difficult for buyers of crude to consistently get enough supply through standardised world market exchanges. Crude oil produced by the OPEC (Organization of Petroleum Exporting Countries) makes-up about 83% of the world's supply and OPEC's oils are sold according to production quota allocated to its member states. Many times these allocations have been ...
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Crude oil is a commodity traded on the major world stock exchanges and the demand for crude, many times, surpasses the supply. As a result of this, it has become increasingly difficult for buyers of crude to consistently get enough supply through standardised world market exchanges. Crude oil produced by the OPEC (Organization of Petroleum Exporting Countries) makes-up about 83% of the world's supply and OPEC's oils are sold according to production quota allocated to its member states. Many times these allocations have been bought or booked ahead of time by countries and institutions leaving many buyers to look for alternatives to meet their needs.Many countries like Nigeria also sell much of their crude through allocations to community chiefs, corporations and individuals who have to, in turn, sell their allocations on the open market. Buying crude in the open market is complicated and it is a race against time since the supply is limited. To further complicate matters, various levels of middle men are involved at various stages and worse still these crude oils are not verifiable in the OPEC sales inventory in London that is used as the standard for the official crude market. The complexity never seizes in the present day when the factor of fraudulent persons and practices synapses along the transaction conduits of open market deals these days. Fraud in this industry has caused distrust to germinate all over the place making business transactions difficult and riskier.It is surprising that until date there are no standardisations on how crude oil should be sold in the open market even though this market is older than the OPEC market because crude oil exchanges have existed long before the formation of OPEC in the 1970s. This book uses the sale of Nigerian Bonny Light Crude Oil (BLCO), as complex as it may be, to set the stage for the standardisation of the secondary market. The need for organised and standardised procedures in this market is highly desirable and sought after. Unified standards for the sale of crude oil in the open market will certainly stop the propagation of fraudulent practices in the open market, improve transparency, and multiple trade and commerce in this indispensable sector of the petroleum trade. This book is a must read for both Buyers and Sellers seeking to know the truth about BLCO marketing. Buying and selling crude should not be filled with risks as it is right now, it should be smoother, transparent, and quick this way causing exponential trend growth in trade, an antecedent factor in global crude oil supply stabilisation.This book intends to cause apoptosis to phantom crude oil propositions out there, cause sublimation and evaporation of fraudulent practices in the sector, and provide a reference guide to buyers and sellers alike for identifying genuine transactions.
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