Dear Experts,
We have been hunting around for some advice relating to the sales and purchase of Crude oil. Our company historically trades in metals and cements, but is exploring the crude oil market following an interesting development.
Our buyer is insisting that their bank need to contractually and finically interact with out principle supplier and that their bank (given the nature of the commodity) will not issue an LC to us, but only to the supplier.
Can anyone explain this issue? Is this mechanic a prerequisite of the Oil sector? Can anyone detail the documentation a "typical" buyer of crude oil would need to present to their there bank in order to raise an LC? Or can anyone detail what we would have to present to our buyer that would allow us to trade in the typical “back to back” way?
Kindest regards
Harry