Start Crude Oil Import/Export Business

Only a few countries produce crude oil and not in commercial quantity. Even those that manage commerciality consume most of their product.

They also augment the demand with imports from other countries. For example the United States of America in 2015 produced about 14 million barrel per day and consumed 19 million barrels daily.

The short fall is augmented with imports of crude. It is not uncommon for petrol producing nations to also have huge storage facilities.

There are many types of refined petroleum products for different markets. Some common products are diesel, engine oil, jet fuel and kerosene.

Reduced Dependency on Petroleum Products

Advanced countries are gradually moving away from petroleum products. This is because of the negative environmental problems associated to the product.

Serious environmental problems include pollution of waterways, depleted ozone layer, air pollution and contaminants in the soil. Petroleum affects both fauna and animal natural habitats.

Reliance on petroleum products are gradually turning to biodiesel, ethanol and other sources of biofuel.

How to start a petrol station

How to Start Crude Oil Import/Export Business

• Find a genuine buyer
• Avoid the middleman
• Focus on oil processing company’s
• Do due diligence and gather information on buyer
• Compare prices for purchase and sales
• Get exact specification of type of crude oil
• What are the delivery terms
• Packing terms
• Payment terms
• Find direct marketers
• Sign commission contract with buyers
• Complete all relevant documentation

Types of Petroleum Products

Crude oil is the primary resource produced in an oil field. There are many petroleum products of equal economic value.

We have refined products such as aviation fuel, diesel fuel and ethanol. Others are engine oil lubricants, unrefined oils, gasoline, liquids and unfinished oils.

Vehicles are the major consumers of most petroleum products including machinery. Supplying the petroleum products in crude or refined form is highly lucrative. You work on commission, based on the supply and purchase prices.

Major Producers/Consumers of Crude Oil

The major producers of crude oil are found in the Middle East, Asia, Africa and Russia. They collectively account for 68% of oil produced around the world.

European Union countries buy lots of petroleum products from these countries. Other import locations are Mexico, China, Brazil, Netherlands and Canada.

Crude oil Brokerage

Crude oil brokerage involves finding buyers and end users of the product. You need to first establish a sales contract with buyers.

There are many modes of transfer of crude oil from broker to buyer. Some common methods involve tanker to tanker transfer, tanker take over and free board operations.

In a many counties there are lots of documentation and bottlenecks that make the business tedious. To start a crude oil import/export business you need to learn the basics and secure the right documentation.

Work with Marketers

The price of oil fluctuates constantly based on many factors. Some of the factors are war, accidents, over/under production and other parameters.

You need to stay abreast of changing prices and network with marketers. The reason is because you need the best prices to buy the product. Make sure the marketers are genuine with good track record.

Connect with Buyers

Finding both domestic and international buyers is a herculean task. This is because there are only a few legitimate buyers of the product.

Contact regulatory bodies in countries of interest for list of genuine buyers. Finding them is one challenge and securing a contract to supply another.

Crude oil producers usually have registered marketers for their products so approach them for references. The best places to find crude oil buyers are countries with little or no reserve of crude.

You also need to sign commission contract with buyers.