How to Verify a Petroleum Supplier Before Signing

Petroleum trading attracts fraud. Every year buyers lose millions to fake suppliers, ghost cargoes, and forged documentation. Before you sign a single SPA, you need a rigorous supplier verification process — not a handshake and a LinkedIn profile.

This guide covers the complete petroleum supplier KYC process: what to check, what to ask for, and the red flags that should stop a deal cold.

Why Oil Supplier Due Diligence Matters

The petroleum market operates largely on trust, documents, and intermediary networks. That creates opportunity for bad actors. A "seller" may have no product, no storage, and no mandate. They may hold a commission chain ten people deep. They might present convincing but forged proof of product.

Proper oil supplier due diligence is not optional — it's the difference between a completed deal and a fraud investigation.

Step 1: Verify Corporate Identity

Start with the basics before any product discussion:

• Company registration certificate — must match the entity name on all contracts
• Certificate of Incorporation and current Articles of Association
• VAT registration number (if applicable)
• Beneficial owner disclosure — who ultimately controls the entity?
• Board resolution authorising the signatory on your deal

Cross-reference the company name, registration number, and address against the official company registry in the jurisdiction of incorporation. In the UK, that's Companies House. In the US, the relevant state secretary of state. This step takes ten minutes and eliminates most fraudulent entities immediately.

Step 2: Confirm Storage and Product Availability

Any genuine supplier should be able to demonstrate physical possession or allocated product. Request:

• Storage agreement with a named terminal
• Tank receipt or warehouse receipt (original, not a scan)
• SGS or Intertek inspection report on the most recent cargo
• Q88 vessel documents if shipping is underway

If the supplier cannot produce a current tank receipt from a recognised terminal (Rotterdam, Singapore, Fujairah, Houston), they do not have product. An ICPO and an FCO do not equal product in hand.

Step 3: Run AML and Sanctions Checks

Before advancing to contract stage, every party — supplier, mandate, intermediary — must be screened against:

• OFAC SDN List (US)
• EU Consolidated Sanctions List
• UN Security Council sanctions
• FATF high-risk jurisdiction list

Use a service like Refinitiv World-Check, Dow Jones Risk & Compliance, or at minimum a manual government portal check. This is part of standard petroleum KYC and is now required by most correspondent banks before they will process letters of credit.

Step 4: Sign NCND/ICPO Before Sharing Any Offer

A Non-Circumvention Non-Disclosure Agreement (NCND) protects your commercial relationship before you exchange business sensitive information. It should name all parties in the chain, define circumvention periods (typically 24 months), and be governed by a neutral jurisdiction.

Do not proceed to product discussion without a signed NCND. Suppliers who refuse this are not serious.

Red Flags That Should Kill a Deal

These are automatic stop signals when verifying a petroleum supplier:

• Free email domain — any seller using @gmail, @yahoo, or @outlook for a multi-million dollar deal
• Price 30%+ below Platts — if the price sounds too good, the product doesn't exist
• Pressure to "allocate first, KYC later" — a legitimate supplier will never demand allocation before compliance
• No direct terminal contact — the supplier cannot give you a direct phone at the storage facility
• Documents with inconsistent fonts, logos, or dates — basic forgeries are common
• Changing company names — the "supplier" in the FCO doesn't match the entity in the SPA

The Petroleum Supplier KYC Checklist

Before signing any SPA, you should have in hand:

1. ✅ Company registration certificate (original)
2. ✅ Certificate of Incorporation
3. ✅ Board resolution authorising signatory
4. ✅ Passport / government ID of authorised signatory
5. ✅ Current storage proof (terminal receipt, dated within 60 days)
6. ✅ Most recent product inspection report (SGS/Intertek)
7. ✅ Signed NCND/ICPO
8. ✅ Sanctions screening confirmation on all named parties
9. ✅ Bank coordinates verified (call the bank independently)

Work with a Verified Supply Chain

Completing supplier verification is only half the work if you're sourcing through an unvetted network. Ja-Cari Energy works refinery and buyer direct — our deals include full documentation from storage through delivery, with mandatory KYC/NDNCA at every stage.

Ready to source petroleum products with a verified counterparty? Start your inquiry with Lizzy — our intake system captures your product requirements and connects you to our sourcing team directly.

Summary

Verifying a petroleum supplier is not bureaucracy — it's basic deal hygiene. Corporate identity checks, product proof, sanctions screening, and proper documentation stop fraud at the gate. The deals that blow up are almost always the ones where someone skipped step two or three because they were in a hurry.

Take the time. Run the checks. Sign the NCND. Then talk about product.