FOB

Free On Board

FOB (Free On Board) is a common shipping term used in international fuel transactions, particularly for refined petroleum products like EN590 10ppm diesel. Under FOB terms, the seller is responsible for delivering the product onboard the buyer’s nominated vessel at the agreed port of loading. Once the fuel is loaded and passes the ship’s rail, the risk and ownership transfer to the buyer.

 
Advantages of FOB in Fuel Trading

 

  • Transparent cost structure: buyer controls shipping and insurance.

  • Easier for large-volume buyers who have existing freight arrangements.

  • Seller’s risks are minimized after delivery to the vessel.

 
Typical Ports for FOB Fuel Deals

 

  • Rotterdam (Netherlands)

  • Houston (USA)

  • Primorsk or Novorossiysk (Russia)

  • Fujairah (UAE)

  • Singapore

CIF

Carriage Insurance and Freight

CIF (Cost, Insurance, and Freight) is a widely used international trade term in fuel transactions. Under CIF terms, the seller is responsible for delivering the fuel to the buyer’s designated port, including arranging and paying for transportation and marine insurance. Ownership and risk transfer only occur once the fuel is safely delivered to the destination port.

 

Advantages of CIF in Fuel Trading

 

  • Buyer benefits from seller’s logistics and insurance expertise.

  • Simplifies procurement for buyers without shipping contacts or experience.

  • Seller maintains control of shipping, reducing risk of delays or compliance issues.

 
Typical Destination Ports for CIF Fuel Deals

 

  • Lagos (Nigeria)

  • Tema (Ghana)

  • Durban (South Africa)

  • Port Klang (Malaysia)

  • Port Qasim (Pakistan)

  • European ports (e.g., Antwerp, Marseille)

FAQ

Most frequent questions and answers

FOB (Free On Board) means the buyer takes ownership of the fuel once it is loaded onto the nominated vessel at the port of origin.
CIF (Cost, Insurance, and Freight) means the seller covers shipping and insurance to the buyer’s discharge port, and the buyer takes ownership upon arrival.

Under FOB, the buyer arranges the vessel and shipping. The seller is responsible for loading the product and ensuring it clears export customs.

Under CIF, the seller arranges the shipping and marine insurance, delivering the cargo to the buyer’s nominated port.

In FOB, risk transfers to the buyer once the product passes the ship’s rail at the loading port.

In CIF, the seller bears the risk and cost of transportation until the fuel reaches the discharge port, though legal ownership may still transfer earlier depending on the contract.

FOB is ideal if you have reliable logistics, shipping partners, and prefer more control over transportation.

CIF is better if you want a more hands-off process where the seller handles delivery and insurance to your port.

Supply Chain Partners represents a Geneva-based commodities trading house with direct access  to titleholders of EN590 10ppm, Jet A1 and Crude Oil allocations

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