Physical petroleum trading online is notorious for fraud. Experienced buyers approach every new offer assuming it might be a scam until proven otherwise — and that caution is well founded. Here are the red flags every buyer and broker should know before parting with money or documents.
1. Prices far below the market
The classic lure. A deep discount to the prevailing market is not a bargain; it is bait designed to rush you into a deposit. Genuine EN590, Jet A1 and crude trade within a recognisable range.
2. Upfront fees of any kind
"Verification fee", "allocation fee", "POP release fee", "tank rental deposit", "transfer of title fee" — all variations of the same trick. Legitimate suppliers never charge to prove product exists.
3. Long, unverifiable broker chains
If every party "represents the supplier" but no one can name the actual refinery, terminal or inspection company, there is probably no supplier. Real deals shorten to verifiable principals quickly.
4. Fake allocation and official-looking letters
Forged allocation letters purporting to come from national oil companies (NNPC, ADNOC, Sonangol and others) are common. An official-looking PDF is not proof of anything without a verifiable chain and inspection.
5. Misused bank instruments
MT103, MT199, MT799, MT760 — these SWIFT message types are routinely misrepresented as "proof of funds" or "proof of product". They are not. Treat anyone leaning on them as a warning sign, and read what proof of product really is.
6. Reversed or chaotic procedures
A "seller" demanding your ICPO, banking details and an upfront payment before offering anything verifiable has the process backwards. Compare any offer to a clean CIF/FOB procedure.
How to protect yourself
Insist on independent SGS inspection, named ports, KYC on both sides and a written procedure with no upfront fees. The full method is in how to verify a real oil supplier. LinkPort is built around exactly these protections — see our compliance page.
This article is general information to help buyers assess counterparties. If you suspect fraud, seek advice from your bank, legal counsel or the relevant financial regulator in your jurisdiction.
Frequently asked questions
What is the number-one red flag?
Any upfront fee to "verify", "allocate" or "release" product. Legitimate suppliers never charge for this.
Are MT799/MT760 messages proof of anything?
Not on their own. They are SWIFT message types often misused as false assurance. Rely on contracts, inspection and reciprocal, step-by-step exchange instead.