How to Verify a Crude Oil Seller: A Buyer's Step-by-Step Guide

Before you sign a letter of intent, wire a processing fee, or commit any capital to a crude oil transaction, you need to answer one question with certainty: is this seller who they say they are?

The verification process isn’t complicated. But it does require going beyond the documents a seller hands you — because those are exactly the documents a fraudulent party has spent time and money preparing.

Start with the company registration. Every legitimate business entity has a public record somewhere. What to do:

  • Identify the jurisdiction of incorporation from the company’s documents
  • Pull the filing directly from the relevant public registry (Companies House for UK entities, local commercial registers for EU countries, SEC EDGAR for public US entities)
  • Confirm the registered company name, number, incorporation date, and registered address match what’s on the deal documents
  • Check the company’s filing history — a company with no annual returns or accounts filed is a warning sign even if the registration exists

For jurisdictions with limited public registries (some offshore centers, certain African and Asian markets), use a commercial due diligence data provider or request a third-party company report from a firm operating in that country.

Step 2: Verify the Authorized Signatories

The person conducting your deal needs to be authorized to bind the company. How to check:

  • Cross-reference the name of your contact against the company’s registered authorized signatories (usually listed in the incorporation documents or annual filings)
  • If the contact is acting under a power of attorney, request the POA document and verify it is notarized, apostilled where required, and current
  • If the contact’s name appears nowhere in the company’s official filings, ask for an explanation in writing before proceeding

This step alone eliminates a significant number of fraudulent parties, who often use real company registrations as a front while operating under unauthorized names.

Step 3: Verify the Bank and Financial Standing

A bank comfort letter (BCL) or proof of funds is standard in petroleum transactions. Verification requires more than reading the document. What to do:

  • Identify the issuing bank from the letter
  • Find the bank’s official contact details independently — use the bank’s official website, not the contact information on the letter
  • Call the bank’s trade finance or corporate banking department and ask them to confirm (a) that the letter exists in their records and (b) that the signatory is an authorized representative of the bank
  • For larger transactions, ask your own bank to do a bank-to-bank verification

Never rely solely on a letter. A letter is paper. A confirmed phone call or SWIFT verification is evidence.

Step 4: Verify the Product

If the seller claims to hold a specific cargo or have allocation from a producing entity, the product needs to be independently verified. The key checks:

  • SGS / third-party inspection reports: Verify the report number directly with SGS or the named inspection company. Most have a portal or a direct line for report verification. This takes one phone call.
  • Vessel records: Cross-reference any named vessel against Lloyd’s List Intelligence or MarineTraffic using the vessel’s IMO number. Confirm the vessel’s location history matches the stated loading port and date.
  • Producing entity confirmation: If the seller claims to hold a government allocation or an offtake agreement from a national oil company, request written confirmation from the NOC directly. Legitimate NOCs have trade desks that handle exactly these inquiries.

A seller who resists third-party product verification does not have the product. This is the single clearest indicator of fraud, and it is more common than most buyers expect.

Step 5: Screen for Sanctions Exposure

Before transacting, you need to confirm that the entity, its principals, and its beneficial owners are not subject to sanctions. Where to check:

  • OFAC (US): ofac.treas.gov/sanctions-list-search — covers SDN list and sectoral sanctions
  • UN Security Council: Consolidated sanctions list at un.org
  • EU: EU sanctions map at sanctionsmap.eu
  • UK OFSI: assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/uk-sanctions-list.pdf

Screen the company name, all principal names, and any UBOs (Ultimate Beneficial Owners) disclosed in the onboarding documents. If you are US-linked in any way — through ownership, financing, or transaction banking — OFAC compliance is not optional.

Sanctions lists change. Re-screen counterparties you have worked with before if there has been any significant time gap.

Step 6: Verify the Mandate (If an Intermediary Is Involved)

Most petroleum transactions involve at least one intermediary. If your seller is acting as a broker or mandate holder rather than the direct principal, the mandate chain itself needs to be verified:

  • Obtain the mandate letter from the intermediary and verify that it identifies the ultimate principal clearly
  • Contact the principal independently — not through the intermediary — to confirm the mandate is genuine and current
  • If the intermediary restricts your ability to contact the principal directly, treat that restriction as a disqualifying flag

Legitimate principals in petroleum transactions want to know who their ultimate buyer is. Any structure that systematically blocks that communication is protecting someone — and it is not protecting you.

When to Stop and Walk Away

You should walk away from any deal where:

  • The seller cannot verify their entity through publicly available records
  • Product documentation cannot be confirmed with the named third party
  • Bank verification is resisted or redirected
  • Direct contact with the principal is blocked
  • Any significant discrepancy exists between documents and independent records

The pressure to move fast is one of the most reliable indicators of fraud in petroleum trading. Legitimate deals have room for proper verification. Fraudulent ones are engineered to close before you can check.

If you’re working a deal right now and you’re not certain about the counterparty, the most efficient thing you can do is run a structured assessment before committing capital. Submit your deal at BarrelBridge and we’ll deliver a 15-page report in 5–7 business days.