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There is a profitable way to buy and sell petroleum. There are four key things you will need to be successful with this business. they are:
1. Funds: You will need money to buy petroleum. You will need a minimum of $100,000,000 US. That amount of money can get you up to 2 million barrels of petroleum. You will also need around USD 5 to 10 million for expenses.
2. Petroleum Seller: You will need a seller or supplier of crude oil from where you can buy petroleum. As long as you have money, it is not a big problem.
3. Tanker: You will need a tank where you can store the crude oil. If you want to build a petroleum storage tank, you can also rent one. This is going to be expensive, so it is better for you to make your own tank and save the cost.
4. Petroleum Buyer: This is also not a big problem. This is because many buyers of crude oil are aggressively searching for the available crude oil they want to buy, mainly in the United States and Europe. Crude oil will always be in high demand as far as cars and factories are concerned.
The idea of making a lot of money by buying and selling crude oil is to buy when crude is very cheap and sell when it is expensive. That is, you will buy it when the price is low and sell it when the price is high. You will need to buy a piece of land and build a crude oil storage tank that can be able to store as much crude oil as you want. A crude oil storage tank can be an underground tank or a surface tank.
Once you have completed building the storage tank, the next step is to purchase petroleum. If you have the money to build a storage tank that will hold up to 2 million barrels of petroleum or as many as you want in no more than 2 months. The next step is to find petroleum available for sale. It will be an easy process if you know where to look. You can start sourcing crude oil available for purchase in oil producing countries. When you do this through resellers then you will be able to buy them cheaply through this medium.
There are two ways of getting petroleum from Nigeria. One is through getting oil allocation from NNPC. NNPC stands for Nigeria National Petroleum Corporation. It is a government agency responsible for the sale and purchase of crude oil. you will need:
1. Proof up to $100,000,000
2. Performance Bond up to $1,000,000
3. You will need to own a local oil refinery, international refinery and a major oil trader.
If you are not ready for these conditions then you can buy from those who have already got oil allocation. Those who have got oil allocation from NNPC should always sell the petroleum purchased by them. You can buy from this set of people. Yamal Gas Progress etc. is an example of buying crude oil from this type of oil trader.
Once you find a seller, the next step is to negotiate and close the deal. There are four ways to sell petroleum. They are namely FOB, TTT, TTO and CIF. CIF stands for Cost, Insurance and Freight. It is a method of selling petroleum where the seller does everything from loading the crude oil and shipping it to the buyer’s desired location. This type of method is usually hard to fit and most sellers don’t like to be treated this way. FOB means full on board freight.
The most widely used methods for selling oil are TTO and TTT. TTO simply means tanker take over. In this method, the buyer takes the ship to its destination, unloads the crude oil and brings it back.
TTT simply means Tanker to Tanker. This requires the buyer to come over with a tank while the oil is transshipped and everything gets arranged.
Payment for the product is usually via SWIFT or wire transfer. This can be done either through MT799 via Bank to Bank. Irrevocable letter of credit can also be used for payment etc.
Once you have purchased the product, transfer the crude to your storage tank and let it rest. Keep monitoring it to see when the price of oil will go up. Conflicts between Iran and the United States, and between the United States and Iran, and between South Korea and North Korea, and between North Korea and the rest of the world, can cause petroleum prices to rise. The price of crude oil can also skyrocket due to the conflict in the Niger Delta of Nigeria and the Middle East. Disasters such as hurricanes in the Gulf of Mexico and in cities around the United States along the Gulf can also increase the price of oil.
Once the price of crude oil increases, it is time to sell it. If the price of a barrel of crude oil was $78 and it went up to $100 or more, I am sure you know how much profit you would have made. Let’s say all the expenses you make and the price of a barrel of petroleum is $70 a barrel, then crude rises to $100 and you sell it. The amount you receive will be $30 times 2,000,000 which will give you $60,000,000. This is good money to make in a day. The way to find buyers for your petroleum is to write a letter to the oil refineries with your company letterhead and POP (Proof of Product). State the price you want to sell the barrel for and anything else to persuade oil refineries to buy your petroleum. It is tested and proven to deliver profitable types of oil trading.
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