Commodity Trading — 01
Crude Oil
Crude cargoes traded from the Fujairah hub — benchmark plus differential, assay-driven grade selection, and laycan discipline from nomination to discharge.
How does Wisemann Capital trade crude oil?
Wisemann Capital trades physical crude oil cargoes priced against Brent or Dubai benchmarks plus a quality and location differential. Execution turns on matching the grade — its API gravity, sulphur and assay — to the receiving refinery, fixing laycan and demurrage terms at nomination, and certifying quality and quantity by independent inspection at load and discharge.
How a cargo runs
A crude cargo is worth what the receiving refinery can make from it. The sequence starts there, not at the price.
Refinery fit and grade selection
We start from the refinery's configuration and crude slate, then work back to grades that suit it. API gravity, sulphur content and the full assay — yields, metals, acidity — decide what a barrel is worth to that buyer, and a grade that is cheap on screen can be expensive in the refinery.
Benchmark and differential
Cargoes price against Brent, Dubai or Oman with a differential for quality and location. The benchmark is public and identical for everyone; the differential and the pricing period are negotiated, and they are where the value in a crude trade sits.
Nomination, laycan and demurrage
Vessel nomination, laycan window, loading and discharge rates and the demurrage rate are fixed before fixture. Demurrage is the most common unbudgeted cost in crude trading, and it is almost always a scheduling failure rather than a pricing one.
Storage and optionality
Fujairah sits outside the Strait of Hormuz with substantial storage capacity. Where a position benefits from being held, blended or repositioned rather than forced to market on arrival, storage is contracted as part of the structure from the start.
Contract and payment terms
Crude is normally paid by documentary letter of credit. Our Trade Instruments Facilitation team aligns the credit's documentary conditions with the inspection regime in the sale contract, so the certificates produced at load are exactly the ones the bank will accept.
Inspection and settlement
Independent inspection at load and, where contracted, at discharge determines quality and quantity. Settlement follows certified figures, with any quality adjustments applied as the contract provides.
Contract specification
Typical parameters. Final specification is agreed per contract and certified by independent inspection.
- Grading
- API gravity and sulphur content — light, medium, heavy; sweet or sour
- Assay
- Yields, metals, acidity (TAN), pour point, water and sediment
- Pricing basis
- Brent, Dubai or Oman benchmark plus quality and location differential
- Pricing period
- Agreed per contract — typically around bill of lading date
- Quantity
- Certified at load by shore tank or vessel figures, per contract
- Inspection
- Independent inspection at load and discharge
- Storage hub
- Fujairah, with Singapore and Rotterdam as onward hubs
- Payment
- Documentary letter of credit against conforming documents
- Incoterms
- FOB, CFR, CIFindicative
What we manage on your behalf
Grade against configuration
A sour discount only has value to a refinery that can process sour crude economically. We assess grade against configuration before recommending anything, because the right crude is the one the buyer can run, not the cheapest one available.
Differential exposure
The differential moves with regional supply, freight and refinery margins, independently of the benchmark. It is negotiated against where comparable grades are clearing, not accepted as quoted.
Demurrage discipline
Laycan, laytime and demurrage are agreed at fixture, and discharge-port congestion is priced into the structure rather than absorbed afterwards.
Documentary conformity
Crude letters of credit are document-heavy and unforgiving of discrepancy. Aligning them with the inspection regime before the cargo loads is what keeps payment on time.
Why the Dubai base matters
Crude trades through a small number of hubs, and Dubai's position between producing and consuming regions is structural. Fujairah's storage outside the Strait of Hormuz makes it the natural point in the region to hold and reposition cargo.
Physical crude trading is a logistics business as much as a pricing one. Proximity to storage, tonnage and the counterparties who control both is what turns a position into something that can actually be executed.
Common questions
Frequently asked
How is a crude oil cargo priced?
Against a benchmark — Brent, Dubai or Oman — plus a differential reflecting the grade's quality and delivery location, over an agreed pricing period. The benchmark is public. The differential and the pricing period are negotiated, and together they usually matter more than the headline number.
What does sweet or sour crude mean for a buyer?
It refers to sulphur content. Sweet crude is low in sulphur and cheaper to refine into clean products; sour crude carries more sulphur and needs additional processing, so it trades at a discount. Whether that discount is good value depends entirely on the receiving refinery's configuration.
Why does the assay matter as well as API and sulphur?
API gravity and sulphur content are headline indicators. The assay shows what the crude actually yields — how much gasoline, diesel and fuel oil — and what it contains, such as metals and acidity that affect refinery equipment. Two crudes with similar headline figures can be worth quite different amounts to the same refinery.
Can you hold cargo rather than deliver it straight through?
Yes. Storage at Fujairah lets a position be held, blended or repositioned rather than forced to market on arrival. Where that optionality has value, storage is contracted as part of the structure from the start.
Related
- LPGLPG trading in propane, butane and mixes — contract-price benchmarks, refrigerated or pressurised cargoes, and terminal-matched specification.
- SulphurSulphur trading in granular, prilled, pastille and molten form out of the Middle East — origin access, hazardous-cargo tonnage and quality certification at load.
- Trade Instruments FacilitationFacilitation of letters of credit, standby letters of credit, bank guarantees, performance bonds and advance payment guarantees — structuring, documentation and presentation against the underlying trade.
Discuss a crude oil requirement
Tell us the grade or refinery configuration, the volume and the delivery point, and we will come back on availability and structure.
Start an enquiry