Jet A1 Supply Deal Rotterdam Houston CIF FOB Pricing and Procedure USA Origin
- Jose Pagan
- Jul 31
- 10 min read
A Jet A-1 deal can look simple on the surface: product, price, volume, port, inspection, payment. The hard part is not reading the offer. The hard part is making sure every term matches a real shipment, a real tank, a real title transfer, and a payment process the buyer can verify before funds move.
This post breaks down the proposed Jet A-1 supply deal for Rotterdam and Houston, including pricing, lift volume, commission, inspection, insurance, payment terms, and the working procedure for FOB tank-to-tank transactions.
This is an informational commercial summary only. Buyers, sellers, mandates, and intermediaries should use qualified legal, banking, inspection, and trade finance support before signing or funding any petroleum transaction.
Deal summary for the Jet A-1 offer
The listed product is Jet A-1 aviation turbine fuel, offered by barrel with a trial lift and larger contracted quantities available after the first transaction.
The quoted structure refers to Rotterdam and Houston delivery options, with CIF and FOB language included. In practical terms, the buyer and seller need to confirm whether the transaction is:
FOB Rotterdam
FOB Houston
CIF Rotterdam
CIF Houston
Those are not minor wording differences. They affect who controls freight, who pays insurance, where risk transfers, which documents are needed, and when the buyer pays.
Term | Stated deal detail |
Product | Jet A-1 |
Price per barrel | $140 / $136 per BBL |
Trial lift | 1,000,000 BBL |
Minimum quantity | 1,000,000 BBL |
Maximum quantity | 5,000,000 BBL |
Commission | Buy-side $2 per BBL |
Origin | USA |
Delivery ports | CIF / FOB Rotterdam and Houston |
Incoterm stated | Cost Insurance & Freight |
Loading ports stated | Vladivostok, Rotterdam, and Houston ports |
Payment | T/T wire transfer and MT103 |
Inspection | SGS |
Insurance | Paid by seller, covering 110% of shipment value |
The most important point is consistency. If the origin is USA, but one listed loading port is Vladivostok, the parties should clarify the supply chain before any commercial invoice is signed. A real transaction file should not leave open questions about origin, terminal location, tank availability, refinery source, shipping route, sanctions exposure, or title history.
Jet A1 Price and volume terms need clear confirmation
The offer lists $140 / $136 per barrel. That wording needs clarification before the buyer issues an ICPO or signs the commercial invoice.
The two prices could represent different delivery modes, different ports, gross and net pricing, trial and contract pricing, or a buyer and seller side structure. The deal text does not define the split, so it should be written clearly in the commercial invoice.
A clean price clause should state:
The exact price per barrel
The currency, in this case U.S. dollars
Whether the price is gross or net
Whether commission is included or separate
Whether inspection, insurance, tank charges, and port fees are included
Whether price changes apply after the trial lift
Which Incoterm applies to that price
The volume terms are large. A 1,000,000 BBL trial lift is a major movement of Jet A-1. At $136 to $140 per barrel, the cargo value is substantial. That size calls for strict verification before payment and before title transfer.
The listed quantity range is:
Quantity type | Barrels |
Trial lift | 1,000,000 BBL |
Minimum lift | 1,000,000 BBL |
Maximum lift | 5,000,000 BBL |
The buyer should also confirm whether the maximum quantity is per month, per contract, per lift, or subject to a delivery schedule. Without that detail, the maximum volume is only a headline number.
CIF and FOB carry different obligations
The title refers to CIF and FOB, while the procedure provided is specifically for FOB Rotterdam or Houston. That distinction matters.
Under a typical FOB structure, the seller makes product available at the named port or terminal. Risk and title transfer terms depend on the contract, but the buyer is usually responsible for arranging onward movement after taking delivery.
Under CIF, the seller usually arranges and pays for cost, insurance, and freight to the named destination port. The seller also provides insurance cover. The offer states that insurance is paid by the seller and covers 110% of the shipment value, which aligns more closely with CIF language.
The parties should not rely on mixed wording. A transaction cannot be partly CIF and partly FOB unless separate scenarios are clearly priced and documented.
Issue | FOB Rotterdam or Houston | CIF Rotterdam or Houston |
Freight control | Usually buyer after delivery point | Seller arranges freight to destination |
Insurance | Often buyer after risk transfer | Seller provides agreed cover |
Tank verification | Central to FOB tank-to-tank deals | May still apply, but shipping documents matter more |
Payment trigger | Often after dip test, injection, and title transfer terms | Often tied to shipping documents and contract terms |
Main concern | Product existence in seller tank | Cargo movement, vessel documents, and insurance |
For this proposed Jet A1 Supply Deal Roterdam Houston CIF FOB Pricing and Procedure, the safest approach is to select one route first, then align every document to that route.
Key documents in the transaction file
The procedure uses several common petroleum trade abbreviations. Each document has a purpose, but buyers should verify every document with the issuing party or terminal.
ICPO from the buyer
The buyer starts by accepting the seller’s working procedure and issuing an Irrevocable Corporate Purchase Order, usually called an ICPO.
The ICPO should be addressed to the end seller through the seller’s representative, as described in the procedure. It should include the product, quantity, price, port, delivery terms, buyer banking details if required, and proof that the buyer can perform.
The ICPO should not contain vague terms that conflict with the seller’s procedure.
Commercial invoice from the seller
After receiving the ICPO, the seller issues the commercial invoice, often called the CI. The buyer signs and returns it.
The CI is one of the central documents in the transaction. It should match the ICPO and should not introduce new terms without review.
A good CI confirms:
Product name and specification
Quantity and tolerance
Price per barrel
Total contract value
Delivery port
Incoterm
Inspection terms
Payment terms
Commission language
Title transfer condition
Tank storage agreement from the buyer
The buyer is expected to return the signed CI along with the buyer’s Tank Storage Agreement, known as TSA.
For FOB tank-to-tank transactions, the TSA shows that the buyer has a tank ready to receive product. The seller will usually need this before approving injection into the buyer’s tank.
A TSA should be checked directly with the tank farm. False or unverifiable tank documents are a common risk in fuel trades.
PPOP from the seller
The seller then provides partial proof of product, or PPOP.
The listed PPOP package includes:
Product passport, also called a product analysis report
Authorization to verify by email or call
Commitment letter to supplier
Authorization to sell and collect
Tank-to-tank injection agreement, signed by the buyer’s tank farm
These documents help the buyer verify the product and the seller’s authority. They are not a substitute for independent terminal confirmation, SGS verification, or a successful dip test where applicable.
SGS report and inspection papers
The procedure states that the seller provides the SGS report, injection report, and unconditional DTA.
SGS is widely known as an inspection and testing company, but any inspection report should be verified through official channels. The buyer should confirm report numbers, dates, product details, tank number, and whether the report applies to the specific parcel being sold.
DTA and dip test access
A DTA is commonly understood as authorization for a dip test. The procedure says the seller provides an unconditional DTA.
The dip test allows the buyer or buyer’s appointed inspector to confirm the product in the seller’s tank. For FOB terminal transactions, this is one of the most important steps.
The dip test should confirm:
Product existence
Product type
Approximate volume
Quality match against Jet A-1 specification
Tank details
Terminal cooperation
Working procedure for FOB Rotterdam or Houston
The proposed working procedure follows an ICPO-to-CI-to-PPOP-to-dip-test-to-injection-to-payment sequence. Below is a cleaned-up version of the process in practical order.
1. Buyer accepts procedure and issues ICPO
The buyer reviews the seller’s working procedure. If acceptable, the buyer issues an ICPO addressed to the end seller through the seller’s representative.
At this stage, the buyer should confirm the port, price, quantity, commission, and whether the deal is FOB or CIF.
2. Seller issues the commercial invoice
The seller issues a CI. The buyer signs it and returns it with the buyer’s TSA.
This is where the parties should catch mismatches. If the CI says one port and the TSA names another terminal, the process should stop until corrected.
3. Seller provides PPOP documents
The seller provides the listed PPOP documents to support the product claim and seller authority.
The buyer checks the product passport, ATV, supplier commitment letter, ATSC, and TTIA. The tank farm should verify any document that carries its name or requires its signature.
4. Seller provides SGS report and DTA
The seller provides the SGS report, injection report if already available, and unconditional DTA.
The buyer should verify the inspection report and confirm that the DTA gives real access to test the seller’s tank.
5. NCNDA and IMFPA are signed before commission payment flow
The procedure states that NCNDA and IMFPA will be signed. These documents protect intermediaries and define payment of commissions.
Buy-side commission is listed as $2 per barrel. For a 1,000,000 BBL lift, that equals $2,000,000 in buy-side commission. The parties should state whether this amount is included in the product price or paid separately.
6. Buyer performs the dip test and provides TSR
After a successful dip test in the seller’s tank, the buyer provides a Tank Storage Receipt, or TSR, within 24 hours.
The TSR confirms the buyer’s receiving tank arrangement. The seller can then move ahead with tank-to-tank injection.
7. Seller injects product into buyer’s tank
The seller proceeds with injection from the seller’s tank to the buyer’s tank. The seller then provides the injection report showing that the product was transferred.
The buyer should confirm received quantity and quality before payment.
8. Buyer pays by MT103 and seller transfers title
The buyer makes payment for the total cost of the injected product by MT103. MT103 is a standard SWIFT payment message used as proof that a wire transfer has been sent.
After payment, the seller transfers title ownership and provides export documents required for the transaction.
9. Contract can continue after the first lift
After the first lift closes, the seller pays intermediaries involved in the transaction, and the parties proceed to sign a longer contract if both sides want to continue.
The procedure also states that the buyer pays the buyer side and the seller pays the seller side at the same time the buyer pays the seller for fuel. This should be reflected cleanly in the IMFPA and payment instructions.
Points that need clarification before signing
Several deal details should be clarified in writing before the buyer issues binding documents or allocates tank space.
The origin and loading ports do not fully align
The offer states origin USA, yet it also lists Vladivostok among loading ports. If the product is U.S. origin, the seller should explain why Vladivostok appears in the loading port list.
This is not only a logistics issue. Origin and loading location can affect compliance, customs documents, insurance, port clearance, and bank review.
CIF and FOB should not be mixed in one invoice
The buyer and seller should agree one delivery basis for the transaction. If both CIF and FOB options are available, each should have its own price, document list, and payment trigger.
The price split needs definition
The price line shows $140 / $136 per BBL. The invoice should explain exactly what each number means.
Possible interpretations should not be left to email discussion. The signed CI should settle it.
Terminal verification should happen early
The TSA, TSR, DTA, TTIA, and injection report all depend on terminal cooperation. Buyers should verify tank farm documents directly through official terminal channels, not only through documents passed along by intermediaries.
Payment instructions must match the seller
Payment by T/T wire transfer and MT103 should go only to the verified seller account listed in the signed contract and invoice. Any late change of bank account should trigger enhanced checks.
In a large fuel deal, the strongest protection is document consistency. Product, port, tank, price, inspection, payment, and title transfer all need to tell the same story.
Practical checklist for the buyer
Before moving forward, the buyer should confirm the following items in writing.
Checklist item | Why it matters |
Seller identity and authority | Confirms the seller can legally sell and collect payment |
Product origin | Supports compliance, customs, and banking review |
Port and terminal | Confirms where the product is stored or delivered |
Exact Incoterm | Defines cost, risk, insurance, and transport duties |
Final price per barrel | Prevents disputes over gross, net, and commission values |
Tank availability | Supports FOB injection and receipt of product |
SGS verification | Confirms quality and report authenticity |
DTA validity | Allows real dip test access |
TSR authenticity | Confirms buyer tank capacity |
Payment account | Reduces risk of misdirected funds |
Title transfer terms | Shows when ownership legally moves to the buyer |
This checklist does not replace legal review, but it helps identify gaps before the deal reaches payment stage.
A clean version of the commercial position
A clear commercial summary could read this way:
The seller offers Jet A-1 aviation turbine fuel for FOB Rotterdam or FOB Houston delivery, subject to verification, inspection, and tank-to-tank injection procedure. Trial lift is 1,000,000 barrels, with minimum 1,000,000 barrels and maximum 5,000,000 barrels subject to contract schedule. Price is to be confirmed as either $140 or $136 per barrel, with buy-side commission of $2 per barrel handled under NCNDA and IMFPA. Inspection is by SGS. Payment is by T/T wire transfer through MT103 after successful dip test, injection into buyer’s tank, and agreed title transfer procedure. Insurance, if CIF terms apply, is paid by seller at 110% of shipment value.
That version still needs contract detail, but it removes much of the confusion. It separates FOB from CIF, flags the price issue, and connects payment to verified product movement.
Final takeaway
A Jet A-1 supply transaction at 1,000,000 to 5,000,000 barrels is too large for loose wording. The numbers matter, but the procedure matters more.
Before signing, the buyer and seller should align the price, port, Incoterm, origin, tank documents, SGS inspection, commission payment, MT103 instructions, and title transfer language. If one part does not match, the deal should pause until the record is corrected.
A strong Jet A-1 transaction is not built on speed. It is built on verified product, clear documents, clean payment terms, and a delivery procedure that every party can prove.
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