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Advice to suppliers and PCT’s world wide: 

Personal opinion of  the Author served without prejudice . 

Posted: March  9,  2020.

FTN Exporting has met many suppliers of crude oil over a 30 year period, more so in the last few years as we  attempt to complete our second publication  to do with crude oil and fuel sales and the Professional Commodity  Trader (PCT).  A few  issues  that seem to be always be apparent  with primary suppliers is the idea that since said  suppliers are already ‘supplying’ the world with such products, why shroud they allow a PCT to supply a  ‘new customer’ who at  one time was a customer of the supplier anyway. The other main issues are to do with sanctions laws and money laundering which often requires for the PCT to submit a ‘whole lot of forms’ to qualify for supply; which a PCT cannot submit as  we  are buyers, and  not end users of the products sought. A PCT does not have ‘a few billions’ dollars spare to  satisfy the  financial information often sought  on such forms and as often required, and the PCT will not  disclose our end buyers (our clients)  in meeting with the ‘intrusive’ demands  sought on such forms. In short, primary suppliers  will not  supply of crude oil to an intermediary or  even a highly informed PCT may be assumed.  OPEC members are deemed to be primary suppliers. Crude oil supplier world wide from  around 90 countries;30% are not OPEC members. We call these  suppliers  ‘secondary market’ suppliers . Unlike most think, most  secondary suppliers also often suffer from ‘the sickness of the forms.’  Primary and Secondary suppliers  may have streamlined  the way they do business, but in essence have not actually changed the way of doing business for around a century. With crude prices  being so low one would think that a crude oil supplier would be eager to secure a large contract. No so! Crude prices serves a political agenda as well a speculative market place and imputation from other ‘investments’  like i.e: Pension funds and the likes.  As for Sanctions?  What happened to the so called ‘rule of law.’  Sanctions and Tariffs  are  the tools used by weak  minded politicians and Governments in serving an  easy way out of a  complex issue, in pretending that they are doing ‘something’ when in fact what they are doing is  destroying  international business potential. 

FTN Exporting often receives  offers for the supply of crude oil which we dismiss ‘in 30 seconds flat’ as our long experience is able to identify ‘no hope deals’ quickly. We get very few ‘real’ supply of  crude oil. The internet has more crude oil and fuels on offer in any given day , that the world is able to produce in a year; such offers  as made by ill informed intermediaries and traders. As for the highly informed Top 200 ranked  FTNX endorsed  PCT associated deals; FTN Exporting has only ever seen two or three  genuine crude oil suppliers and supporting offers  since 2010. One was from Mexico and the others from Russia; both had accepted FTN exporting  formidable procedures while is the same period of time oil giants that we have approached,  were complimenting  FTN Exporting about our  structure and trading  procedures  which bring us to the next point in contention and specific reason why such suppliers claim we need to follow their ‘strict’  process. Supplier often cite that issues of ‘Sanctions and Money Laundering’ are the biggest  issues  they need to address and that “if a PCT does not  disclose everything upfront” no offer supporting supply is possible, to which the following insight is now served accordingly.


  1. A quick look at court litigation around the world, crude /fuel suppliers and end buyers  lead the way. 
  2. For all their so called  strict ’formalities’  process and procedures, legal challenges are often apparent.
  3. FTNX has provided opinion in legal cases to do with illegal  crude oil sales out of Iraq, to a intermediary breaking UN sanctions. One aspect  become clear was the  way improper payments for such  supply were made
  4. Money Laundering and POCA ( Proceeds of Crime Act) issues (excuses)  will nearly  always involve suspicious and improper payment methods.
  5. We were unable to find one case proper where money  laundering and sanction issues were apparent when a UCP 600 endorsed DLC was used as the payment instrument.Why?

To begin with Paragraph (4) defines  that a “Buyer” such as FTN Exporting buying crude oil from lets say Russian producers where financial  Sanction are in place with USA  would  instantly record a failed deal, once our bank in Australia receives instructions to transfer the financial instrument,  to pay for such goods. Our bank a leading top 100  ranked  bank of the  world will not touch such a DLC while such Sanctions are in place.  All banks world wide (Over 90%) adhering to  ICC UCP rules apply the same aspect.  But it goes beyond that,  as recently seen in the Rosneft case (Breach of UN Sanctions)  and an American company serving invoices on its behalf; if a company even serves ‘assistance’ to a supplier in a sanctioned country with no involvement is the underlying contact of sale, penalties and severe consequences will follow. 

If FTN Exporting is paying for goods using a UCP 600 ruling DLC, and the supplier (Its bank) from a non sanctioned country is where acceptance of the DLC is to take place, then this one act alone precludes the idea that  practices pertaining to money laundering is taking place or that a deal with a country holding Sanction  with  USA is in effect. How clear its that ? Unless FTNX acts differently, it cannot enter into such illegal deals. Its bank assures as much as a matter of law.  Trying to state as much to a crude oil supplier is often a waste of time.Mist are very ware of this aspect related to payments.  The same protective aspect is not available when other forms of payment are apparent; especially when a SLC and not DLC is used, which bring us back to the qualifying aspect sought by suppliers is not warranted and that the only reason such demands are made is more to do with circumvention, than good safe practices. In the earlier years pre 2001 FTNX did abide  by, on at least 3 occasions, with supplier’s formalities. We gave them first class  bank supported qualifying  information (BCL) and disclosed  our  end buyer,  only to be told 4 weeks later that they were ‘unable to supply us.’ So there is no guarantee of supply, even if FTNX qualifies, and meets the demands sought.  As stated  such aspects are not warranted all because  we are asking for  quote or offer . A supplier can ask for anything they like (they get the PPIC anyway once the contract is signed) AFTER the offer is accepted by the PCT as a matter of contract. But suppliers will not provide the offer or  quote to begin with, therefore such an aspect cannot be tested.  They cannot readily assess the difference between an  ill informed intermediary and an informed PCT or end user and ‘Buyer’ is a  truism, especially when you consider the many idiotic traders hounding such supplier for decades  with no potential of a deal eventuating.  

Unless this one attitude changes injudicious and ‘suspect’ suppliers in general will not supply a PCT with crude oil  may be assumed. The only hope to secure such crude  oil is   from a non opec producer or third party trading houses who has already met  the suppliers pre qualifying demands. Securing processed fuels is by far the better option as all the  adverse aspects applied  the supply of crude oil is diminished  once by-products are formed form such, albeit other ‘doable’ issues will  arise.  There are many smaller countries looking for such refined products and will pay a good premium to have deliveries occur monthly. Large fuel  suppliers  are not  interested is serving small shipment to  end buyers located in  small countries.

 A PCT must  spend less time trying to source  Crude oil and should place much more efforts in  securing  refined fuels is the proper trading aspect. Crude oil like  LNG deals are tested only when presented  and dismissed accordingly 95% of the time as fake . D2 and Kerosene are the best refined product for a PCT to source. A PCT cannot waste  many months needed  to  secure a bone-fide crude oil deal unless an  offer is  served by an  export ready supplier and that such crude oil deals  apply ICC FOB delivery rules is now the standards perspective as  far as the PCT is concerned. We leave the crude oil market place for ill informed intermediaries  to ‘play in.’


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