Letter of Credit for Petroleum Products
Petroleum trades move fast and carry real payment risk. We structure LCs that clear examinations and actually pay. Sight and usance DLCs under UCP600, standbys under ISP98, URDG 758 guarantees where mandated, issuer and confirmer lineups that beneficiaries accept, and cash flow options like UPAS or UPAU. From draft wording to SWIFT and through expiry, we keep settlement predictable.
Who We Serve
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Traders and distributors buying or selling crude and refined products
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Importers, industrials, airlines, utilities, and bunkering firms
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NOCs, SOEs, refineries, and government buyers that require specific forms
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Storage and terminal operators needing security for throughput and fees
Payment Structures We Arrange
- DLC MT700 sight or usance 30 to 180 days under UCP600
- Standby LC under ISP98 or UCP600 for payment or performance
- UPAS for sight payout to seller with applicant repayment at maturity
- UPAU where the seller is paid at the usance maturity
- Back to back LC and revolving LC capacity for repeat liftings
- Optional confirmation and assignment of proceeds
Typical Documentary Pack
- Commercial invoice, full set clean on board bill of lading
- SGS or equivalent quantity and quality reports
- Certificate of origin and product specs
- Charter party or fixture recap where relevant
- Tank ullage, dip, and outturn reports for STS or terminal deliveries
Products We Finance
Crude Oil
Brent, WTI, Bonny Light, and other grades, often larger tickets and longer settlement cycles that benefit from confirmation and clear reimbursement paths.
Diesel and Gas Oil
AGO and ULSD bulk flows with framework liftings. Back to back and revolving structures help match inbound and outbound trades.
Jet Fuel
Jet A1 and JP54 with strict specs and delivery windows. Standbys for performance and DLCs with inspection triggers reduce disputes.
LNG and Fuel Oils
LNG with floating storage or regas constraints, plus HSFO, LSFO, bitumen, and mazut under documentary controls tied to terminal evidence.
What We Deliver
Wording That Clears
Clean document lists, stated expiry and place, workable business day rules, reimbursement and charges clauses that pass examinations.
Issuer and Confirmer Lineup
Names on acceptance lists for majors, NOCs, and terminals. Local confirmation where a domestic undertaking is required for payout certainty.
Back to Back and Revolving
Supplier LC issued against a buyer LC, or revolving capacity tied to release schedules so you do not renegotiate every lifting.
Execution and Presentation Support
Fee letters, MT700 or MT760 issuance, controlled amendments, notice paths, expiry monitoring, and if called, compliant draws that pay.
Controls For Counterparty Comfort
Simple Demand or Document Language
Short, precise text tied to standard petroleum evidence with no hidden conditions beyond the LC or standby wording.
Dates and Place of Presentation
Clear expiry, presentation period, and a practical place with courier or electronic options where accepted by policy.
Issuer Acceptance and Sanctions
Issuer strength fit for corridor, sanctions screening on parties and goods, and optional confirmation to reduce settlement risk.
Charges and Notices
Allocation of issuance, advising, confirmation, courier, and inspection costs set in the LC to prevent disputes at presentation.
Eligibility and Documents
Baseline Profile
- Operating company with verifiable trades and references
- Sale and purchase contract or framework with shipment plan
- Issuer and jurisdiction acceptable to the beneficiary
- Reimbursement or security acceptable to the issuer
Checklist to Start
- KYC, corporate documents, ownership table
- Recent financials and bank statements
- Draft LC or standby text with amount, tenor, rule set, and purpose
- Beneficiary instructions and any required template
Process to Issuance
- Share contract, counterparty instructions or template, KYC, and financials.
- Receive eligibility view, issuer and confirmer options, and fee letters.
- Finalize wording, rule set, expiry, place of presentation, and charges.
- Issue MT700 or MT760 and confirm effectiveness with the advising bank.
- Manage amendments, notices, and any extension events and track expiry.
- If called, present the stated documents or demand and arrange payout when compliant.
Illustrative Pricing
Issuance 0.30% to 1.20% flat per 90 days by issuer and corridor. Confirmation 0.40% to 1.70% flat where required. Document examination per schedule. UPAS discount margin priced over base for the usance period. Legal, inspection, and courier costs apply. Final allocation follows the charges clause.
Frequently Asked Questions
How does a back to back LC work in petroleum trades?
We issue a supplier LC against a buyer LC. The supplier ships against our LC while the buyer LC secures our reimbursement. This frees the trader’s balance sheet and keeps both sides protected.
UPAS or UPAU for refined products. Which should I choose?
Choose UPAS when the supplier needs cash at sight and the applicant wants to repay at maturity. Choose UPAU when the supplier can wait for the usance date and pricing supports that timing.
What documents reduce discrepancy risk the most?
A clean on board bill of lading, correct SGS quality and quantity, matching specs and CO, clear shipment dates, and a place of presentation the beneficiary can reach without friction.
Request Petroleum LC Terms
Share your contract or template, preferred wording, amount, tenor, KYC, and financials. We will revert with eligibility, pricing bands, issuer and confirmation options, and a direct path to issuance and settlement for SBLCs, DLCs, and usance structures including UPAS or UPAU.
Request Indicative Terms
Financely acts as advisor and arranger on a best efforts basis. We are not a bank. All mandates are subject to KYC and AML, sanctions screening, credit approval, legal documentation, counterparty capacity, and applicable laws. Nothing here is a commitment to lend or an offer of securities. Terms vary by bank names, jurisdictions, and documentary quality.