Most physical crude oil offers that land in a buyer’s inbox are not real. The cargo does not exist, the seller is not who they claim to be, and the only thing that moves is the buyer’s money. Recognising the warning signs is the cheapest insurance in the business.
ICPO (Irrevocable Corporate Purchase Order): A buyer’s formal intent to purchase. Harmless on its own, but fraudsters demand it early to harvest your company details and create a paper trail that looks legitimate.
POP (Proof of Product): Documents a seller offers to “prove” the cargo exists. Easily forged, and rarely verifiable without an independent check at the load port.
SBLC / BG (Standby Letter of Credit / Bank Guarantee): Real payment instruments in legitimate trade, often demanded prematurely in scams to pressure a buyer into committing bank facilities to a deal that does not exist.
NCNDA / IMFPA: Non-circumvention and fee-protection agreements used by intermediaries. Their heavy presence in an offer signals a long broker chain, where nobody in the middle has actually seen the product.
ASWP (Any Safe World Port): A CIF offer with no named load port. Real cargoes load from a specific terminal. “Any safe world port” almost always means there is no port at all.
Why Crude Oil Attracts Fraud
Anyone who has spent time around physical petroleum trading has seen the email. A seller, often introducing themselves as the appointed mandate of a national oil company or a major refinery, offers a well-known crude grade at a steep discount to the published benchmark. The volumes are large, the procedure looks formal, and the language is dense with acronyms. It reads like the real thing. Most of the time, it is not.
Crude oil is a near-perfect target for fraud. The headline values are enormous, so even a small “fee” extracted from a hopeful buyer is worth the fraudster’s effort. The trade is genuinely complex, which means an unfamiliar buyer cannot easily tell a normal procedure from an invented one. And the market is global and opaque enough that a stranger claiming to represent a refinery in another country is hard to verify quickly. Add the lure of a below-market discount and you have a scheme that has separated experienced businesspeople from very large sums.
The scale is not trivial. The FBI’s Internet Crime Complaint Center logged a record US$16.6 billion in reported losses in 2024, most of it fraud. Petroleum cargoes have their own dedicated warnings. The ICC International Maritime Bureau has flagged the fraudulent sale of oil products for years, describing cases where forged ownership documents are sold to unwitting buyers at a heavy discount or for an advance fee, and rogue charter offers built around vessels that had already been scrapped or renamed. Its advice is consistent: verify every party and treat any advance-fee request with extreme caution.
The mechanics rarely change. The fraudster does not need to deliver oil. They need only to keep a buyer engaged long enough to extract a payment, framed as a storage fee, a tank-rental charge, a “dip test” authorisation cost, a transfer fee, or a documentation charge. Once that money moves, the seller becomes unreachable, or a new fee appears, and then another.
The Anatomy of a Fake Offer
A genuine physical crude transaction follows a logical sequence. The parties establish who they are, the buyer’s interest is documented, the seller demonstrates a real cargo, an independent inspector verifies quality and quantity, and payment is structured so that money and title change hands against verified performance. Risk is balanced on both sides.
A fraudulent offer inverts that logic. The seller insists the buyer prove funds, issue purchase orders, and in many cases pay a fee before the seller has shown anything real. The buyer is asked to carry all the risk and act first, while the seller offers documents that cannot be independently checked. When the sequence puts the buyer’s money ahead of any verifiable proof of product, the deal is built backwards on purpose.
When the sequence puts the buyer’s money ahead of any verifiable proof of product, the deal is built backwards on purpose.
The other tell is tone. Legitimate counterparties are patient because they expect scrutiny. Fraudsters manufacture urgency. There is always another buyer waiting, an allocation about to expire, or a refinery window closing today. Pressure is the tool that stops a buyer from doing the checks that would expose the scheme.
The Red Flags, One by One
No single signal proves fraud, but these patterns rarely appear in real transactions. When several show up together, treat the offer as fake until proven otherwise.
Where Escrow Fits, and Where It Doesn’t
Escrow is one of the most effective protections in a physical trade, and one of the most misunderstood. In a properly structured arrangement, a neutral third party holds the buyer’s funds and releases them only when agreed conditions are met, typically the presentation of verified shipping and inspection documents that confirm the cargo is real and on its way. The buyer is protected because money does not leave until performance is proven. The seller is protected because committed funds are demonstrably in place.
That protection only works when the escrow agent is genuine. Fraudsters have learned to fake this layer too, proposing an “escrow lawyer” or “escrow company” that is part of the scheme. The funds go into an account the fraudster controls, and the supposed neutrality is theatre. Escrow protects you only when you have independently verified the agent, confirmed the bank, and read the release conditions yourself rather than accepting the seller’s chosen intermediary.
Escrow protects you only when you have independently verified the agent, confirmed the bank, and read the release conditions yourself.
The principle to hold onto is simple. Escrow should release against verified performance, never against promises. If a structure asks you to fund escrow and then release on the seller’s say-so, or before any independent inspection, it is not protecting you. It is a more sophisticated version of the upfront-fee trap.
What a Legitimate Transaction Looks Like
The clearest way to recognise fraud is to know what a real deal involves. The genuine version is slower, more documented, and more balanced than the version that arrives unsolicited promising fast profit.
Verified counterparties: Both sides complete know-your-customer checks. The seller’s link to the producer or refinery can be confirmed through reputable channels, not just claimed.
A named load port and clear Incoterms: The cargo loads from a specific terminal under defined Incoterms 2020 such as FOB or CIF, so cost and risk transfer are unambiguous.
Independent inspection: A recognised inspector such as SGS or Intertek verifies quality and quantity at load. The buyer does not rely on the seller’s own paperwork.
Reputable payment instruments: Letters of credit or standby instruments are issued through established banks, with terms drafted by the buyer’s own advisors.
Title against documents: Ownership transfers through an endorsed bill of lading, with payment released against verified shipping documents or genuine escrow conditions, not in advance.
Run any offer against that backbone. Where a real transaction would have a verifiable load port, the fake one offers “any safe world port.” Where a real transaction would involve an independent inspector, the fake one offers self-issued proof of product. Where a real transaction balances risk, the fake one asks you to pay first and trust later. The gaps are the fraud.
Doing the Work Before the Money Moves
Verification costs time, not much money, and it is always cheaper than a loss. Confirm the seller’s claimed relationship with the producer directly with the producer, using contact details you find independently rather than the ones in the offer. Check the named vessel and load port against public maritime data. Have your own bank and legal advisor review every instrument and agreement before you sign. Treat any request for a fee ahead of delivery as the end of the conversation.
The discipline that protects a buyer is unglamorous and consistent. Slow down, verify independently, balance the risk, and never let urgency replace due diligence. The genuine deals survive that scrutiny. The fake ones do not.
Frequently Asked Questions
Is it ever normal for a seller to ask for an upfront fee?
No. In a legitimate physical crude transaction, the seller does not charge the buyer a fee to release product, conduct a dip test, or rent tank space ahead of delivery. Costs like storage and inspection are built into the commercial structure and the price, not collected as separate advance payments from the buyer. A request to pay before delivery is the single most reliable sign of fraud.
What does ASWP mean and why is it a warning sign?
ASWP stands for “any safe world port.” A real CIF cargo is loaded from a specific, identifiable terminal, so an offer that cannot name its load port is usually describing a cargo that does not exist. Genuine deals are precise about where and when the oil loads.
Can escrow arrangements be faked?
Yes. Fraudsters sometimes propose their own “escrow agent” or “escrow lawyer” whose account they actually control. Escrow only protects you when you independently verify the agent and the bank, read the release conditions yourself, and confirm that funds release only against verified performance such as inspection and shipping documents, never on the seller’s promise alone.
Is issuing an ICPO risky?
An Irrevocable Corporate Purchase Order is a normal document in legitimate trade, but fraudsters often demand it very early to collect your company details and bank information and to build a convincing paper trail. Issue one only to a counterparty you have verified, and never let an early ICPO request pressure you into skipping due diligence.
Sources: FBI Internet Crime Complaint Center, 2024 Annual Report · FBI, 2024 Internet Crime Report release · ICC International Maritime Bureau, petroleum-scam advisory · ICC IMB overview · ICC Incoterms 2020
