TTT vs FOB vs CIF: Petroleum Delivery Terms Explained for Buyers

Every petroleum deal collapses on the same three questions: Who owns the product? Where does it change hands? And who pays for what? The answers live in the delivery terms — and the difference between getting them right and wrong can be the difference between a completed deal and a costly dispute.

This guide covers the four delivery terms that govern most petroleum transactions — TTT (Tank-to-Tank), TTV (Tank-to-Vessel), FOB (Free on Board), and CIF (Cost, Insurance and Freight). Plain English. Practical examples. Regional context. No legalese.

The Three Questions Every Delivery Term Answers

Before breaking down each term, understand what every delivery term defines:

1. Who owns the product at each stage? This determines insurance liability and who can claim on a loss.
2. Where does title transfer? The moment and location where legal ownership passes from seller to buyer.
3. What costs fall on each party? Freight, insurance, port charges, loading, unloading — who pays what and when.

These three questions are the lens through which every deal term should be read. Memorise them. They prevent more disputes than any contract clause.

Incoterms 2020: The Framework Behind the Terms

The International Commercial Terms (Incoterms) are published by the International Chamber of Commerce (ICC) and define the standard interpretations of delivery terms used in international trade. The terms in this guide — FOB and CIF — are Incoterms. TTT and TTV are petroleum-specific conventions that sit outside the Incoterms framework but are widely understood in fuel trading markets.

Incoterms are not law. They are agreed interpretations. Both parties must reference them in their contract for them to apply. Always state your delivery term explicitly and link it to the applicable Incoterms edition (currently 2020).

TTT: Tank-to-Tank

TTT — Tank-to-Tank — is the most buyer-favourable of the petroleum delivery terms. Title transfers at the seller's storage tank outlet valve. The buyer takes ownership the moment product leaves the seller's tank.

How TTT Works in Practice

A 5,000 MT cargo of EN 590 is sitting in a seller's tank at Europoort, Rotterdam. Under TTT:

• The seller owns the product until it exits the tank gauge
• Title passes at the seller's flange (outlet of the tank)
• The buyer is immediately responsible for product quantity — what goes out is what the buyer owns
• The buyer arranges and pays for all transport: road tanker, barge, vessel, pipeline

What TTT Costs the Buyer

Under TTT, the buyer pays:

• All freight from seller's tank onwards (vessel charter, barges, road tankers)
• All insurance from the moment of tank transfer
• Port and harbour dues at the destination
• Customs duties, VAT, and landing costs at destination
• All risk of loss or contamination from the moment of title transfer

Why Buyers Accept TTT

TTT is frequently used when the buyer has their own logistics network — their own vessels, their own storage, their own distribution. It gives maximum control. Large traders with owned tanker fleets, major oil companies, and national oil companies operating in the spot market typically prefer TTT for this reason.

TTV: Tank-to-Vessel

TTV — Tank-to-Vessel — is a petroleum-specific variation of TTT. Title transfers at the vessel's intake flange — the point where product enters the buyer's vessel. The seller is responsible for loading the cargo and all associated costs until the vessel is loaded and ready for departure.

How TTV Works in Practice

The same 5,000 MT cargo of EN 590: seller has it in their Rotterdam tank. Under TTV, the seller arranges and pays for:

• Transfer from seller's tank to the buyer's nominated vessel
• Loading operations at the load port
• All port charges, lighterage, and loading fees
• Documentary costs at load port

Risk and ownership pass once the product is confirmed onboard the buyer's vessel via independent metered quantity (shore tank or vessel draft survey).

Why TTV Is Common in Fujairah and Singapore

TTV is the dominant delivery term in the Middle East bunkering and fuel trading hub of Fujairah and widely used in Singapore. It's the practical compromise: the seller handles the loading operation (which they have infrastructure for), while the buyer manages the maritime journey (which suits their commercial model). It's particularly common for Jet A1 and fuel oil transactions where shipowners and charterers need product loaded at specific terminals.

FOB: Free on Board

FOB — Free on Board — is an Incoterm 2020 standard. Title transfers as the product passes the ship's rail at the named port of loading. The seller delivers when the cargo is on board the vessel.

How FOB Works in Practice

A buyer wants 10,000 MT of D2 GOST 305-86 from a Russian port. Under FOB St. Petersburg:

• The seller delivers product to the vessel at St. Petersburg
• The seller pays all costs to get the product on board — including port charges, loading, and export documentation
• Risk passes when the product is over the ship's rail at St. Petersburg
• The buyer nominates the vessel and pays freight, insurance, and all costs from St. Petersburg to destination
• The buyer assumes all risk of loss or damage from the moment the cargo is over the rail

Buyer Obligations Under FOB

The buyer under FOB is responsible for:

• Sea freight from the load port
• Insurance during maritime transit (or self-insurance)
• Voyage costs: bunker fuel, port fees at destination, canal fees
• All risk from the moment cargo crosses the ship's rail at load port
• Customs clearance, duties, and local delivery at destination

Why Rotterdam Prefers FOB

The Rotterdam petroleum market — Europe's largest refined products hub — predominantly uses FOB. Rotterdam buyers are sophisticated traders who prefer to control their own shipping. FOB allows them to:

• Nominate their own vessels (often on COA — Contract of Affreightment)
• Optimise freight costs by running their own tanker programmes
• Choose their own insurers and P&I clubs
• Control the timing of liftings independently of seller logistics

Rotterdam's dominant position as a freight hub means many buyers have better maritime logistics capability than sellers. FOB lets them use that advantage.

CIF: Cost, Insurance and Freight

CIF — Cost, Insurance and Freight — is an Incoterm 2020 standard that shifts more of the logistical burden to the seller. The seller delivers when the product arrives at the destination port — having paid for freight, insurance, and the full journey.

How CIF Works in Practice

A buyer in Lagos needs 8,000 MT of Jet A1. Under CIF Lagos:

• The seller arranges and pays for the vessel, freight, and insurance to Lagos
• Risk passes when the product is loaded on the vessel at origin — but the seller has already paid for insurance coverage during transit
• The seller pays the freight to Lagos and the insurance premium
• The buyer pays import duties, port dues at Lagos, and takes delivery from the vessel at destination

The critical distinction: under CIF, the seller has paid for insurance during transit — but the buyer owns the product once it's loaded. If the vessel sinks before Lagos, the buyer's claim is against the cargo insurer (which the seller has funded). This separation of risk and insurance responsibility is what makes CIF attractive to buyers with less maritime logistics experience.

Why Singapore Uses CIF

Singapore's petroleum trading hub — the largest bunkering port in the world — uses CIF more than any other delivery term. The reason is structural: Singapore's trading companies are often seller-side or serve as intermediaries moving product between origin and destination. CIF lets them offer a complete package to buyers:

• Seller arranges the full logistics chain
• Buyer receives a delivered price — simpler for procurement accounting
• Fewer moving parts for buyers unfamiliar with maritime logistics

CIF also suits structured finance and LC-backed transactions where the buyer's bank needs a clear, fixed delivered cost for the facility.

Price Comparison: How Delivery Terms Affect What You Actually Pay

The same cargo of 5,000 MT EN 590 will carry a different headline price depending on the delivery term. Here's why:

A CIF price will always be higher than an FOB price for the same cargo, because the CIF price includes freight and insurance that the FOB buyer pays separately. The raw product cost may be identical. The delivery term changes the headline number, not necessarily the economics.

When comparing offers across different delivery terms, always "normalise" the price to the same basis. An apparent price difference may simply reflect who is booking the vessel, not a better deal.

Regional Preferences: Which Term to Use and Where

Delivery term preference varies by trading hub. Matching your term to regional practice reduces friction, costs, and disputes.

Payment Timing: When Does Money Move Under Each Term?

Delivery term doesn't just affect logistics — it directly affects payment timing and cash flow risk. This is where buyers most frequently miscalculate.

Key rule: TTT and TTV deals require higher-trust payment mechanisms (often T/T wire after SGS quantity confirmation) because the buyer pays before the maritime journey. CIF and FOB deals are more commonly structured with documentary credits (DLC/SBLC) where the bank holds documents against payment — providing security for both parties.

Risk Allocation: Who Bears the Cost of What?

The table below summarises who is responsible for each cost and risk under each delivery term:

* Under CIF, the seller pays for transit insurance — but risk transfers to the buyer at load port. Insurance protects the cargo on behalf of whoever owns it.

Which Delivery Term Should You Use?

There is no universally "best" delivery term. The right answer depends on your deal size, logistics capability, payment mechanism, and risk appetite:

Use TTT when:

• You have your own vessel programme or contracted tanker capacity
• You're buying from a terminal near your delivery destination
• You're a major oil company or sophisticated independent trader
• You want maximum control and minimum seller dependency

Use TTV when:

• You're buying Jet A1 or fuel oil in Fujairah or Singapore markets
• You have maritime logistics but want the seller to manage the loading operation
• You're buying for a vessel whose crew will receive and manage the fuel

Use FOB when:

• You have freight trading capability and want to optimise shipping costs
• You're buying from Rotterdam or another European hub with sophisticated freight markets
• You want to control vessel nomination, routing, and timing
• You're structuring a deal that will involve multiple liftings (COA structure)

Use CIF when:

• You're a first-time or occasional importer without maritime logistics expertise
• You're buying long-haul product (e.g., fuel oil from Middle East to West Africa)
• Your procurement team wants a single "delivered price" for budgeting
• Your bank financing requires a fixed CIF value for the LC or DLC facility
• You're buying Jet A1 or Gasoil from Singapore traders as a complete package

Common Mistakes Buyers Make With Delivery Terms

1. Accepting the Wrong Term for Their Capability

A buyer with no vessel capability accepts a TTT offer because the price looks attractive. They then scramble to arrange logistics at the last minute, paying a premium for spot vessel charter. The apparent price saving is lost in freight. Always assess your logistics capability before accepting a delivery term.

2. Comparing CIF and FOB Prices Without Normalising

A CIF offer of $520/MT and an FOB offer of $485/MT look different. After normalising to the same basis (adding $35/MT estimated freight and insurance to the FOB price), they may be equivalent. Always normalise to a single basis before comparing.

3. Not Agreeing the Transfer Point Precisely

"FOB" without a named port is not a commercial term. "FOB Rotterdam" and "FOB Houston" carry dramatically different costs. Specify the exact port, terminal, and loading facility in your contract — not just the delivery term code.

4. Missing the Insurance Gap Under FOB

Under FOB, the buyer assumes risk from the moment cargo is over the ship's rail. If the buyer hasn't arranged insurance before loading, the cargo is uninsured during the critical window when title transfers. Always confirm insurance is in place before the cargo is loaded under FOB.

5. Allowing Seller-Controlled Inspection Under TTT

Under TTT, the buyer owns the product at the moment of tank transfer. The quantity should be independently metered by the buyer's inspector (SGS, Intertek) — not the seller's terminal operator. A seller who insists on their own measurement for a TTT transfer is a red flag.

Get Delivery Term Guidance from Ja-Cari Energy

Understanding delivery terms is foundational — but in a live deal, the nuances matter. The difference between FOB and CIF on a 50,000 MT cargo is tens of thousands of dollars in costs, risk, and payment exposure.

Ja-Cari Energy's deal desk provides delivery term guidance as part of every sourcing engagement. We match your logistics capability, destination, and payment mechanism to the right term — and structure the deal accordingly.

Need delivery term advice for your next petroleum deal? Get delivery term guidance from Ja-Cari Energy → Tell us your product, volume, origin, destination, and payment method. We'll recommend the right term and walk you through the commercial implications.

Alternatively, schedule a consultation with our deal desk to discuss your sourcing requirements and how delivery terms affect your cost and risk profile.

Summary

Delivery terms are not administrative details — they are the commercial backbone of every petroleum transaction. TTT, TTV, FOB, and CIF each represent a different distribution of cost, risk, and control between buyer and seller.

The choice of term should match your logistics capability, your payment mechanism, and your risk appetite. TTT suits buyers with maritime infrastructure. TTV is the Fujairah and Singapore norm. FOB is Rotterdam's preference for traders who want freight control. CIF is the buyer-friendly default for long-haul or infrequent importers.

Whatever term you use: name it precisely in the contract, normalise prices to the same basis before comparing offers, and confirm insurance is in place before title transfers. Those three habits prevent more disputes than any arbitration clause.

For more context on structuring petroleum deals correctly, see our guides on how to verify a petroleum supplier and petroleum fraud prevention.