Fuel companies do not need to extract a huge amount of raw materials in order to get the maximum profit from oil reserves. It’s much more important to sell the produced oil in a right way. The subsequent processing and an effective sale strategy are able to multiply the price of extracted raw materials.
Before making a profit, crude oil passes through many stages:
- Delivery to the refinery.
- Processing in order to obtain various petroleum products.
- Delivery of petroleum products to the areas of consumption.
- Retail and wholesale distribution of petroleum products
Dozens of specialized specialists take part in each of these processes. Oil delivery to the end customer is provided by oil traders.
How do oil traders work?
Oil traders are companies specialized on trading of oil products. They monitor prices, stock quotes, search for tenders, negotiate, with the objective to bring together buyers and sellers of oil, earning on sales commission. Major oil traders control international flows of raw materials assuming a bigger role in its extraction and distribution.
The largest international oil traders today:
- Glencore
- Gunvor
- Mercuria
- Trafigura
- Vitol
Oil traders in Russia are companies incorporated to the structure of VIOC (vertically integrated oil companies) and independent traders selling both wholesale and retail, often through their own gas stations.
The vertically integrated companies include the giants of the Russian oil market: Rosneft, Gazprom Neft, Lukoil, TNK-BP, etc. They provide a full range of operations with oil – from exploration and field development to selling to the end consumers.
How to become an oil trader?
Oil trading is the sale of oil and its derivatives. It has much in common with the sale of any raw materials and goods (cement, bricks, grain, etc.). To become an oil trader, it would be desirable to study the specifics and technical characteristics of the product for sale.
At the initial stage, it is necessary to start cooperation with an oil refinery, signing a sales contract, and then look for buyers. In fact, you become an intermediary between the refinery and consumers.
The oil trader monitors oil prices, keeps a wholesale record of petroleum products, provides shipment and delivery of goods and all the related operations.
