Application of a letter of credit in the fuel business

Trade in petroleum products has specific features that radically distinguish this type of business from other foreign trade transactions. Working in the fuel business is very difficult, because the spot market is very volatile. Almost every contract exceeds the approximate cost of 2 million dollars US. Also, it should be remembered that oil is taken into account in barrels during production, but in trade it is taken into account both in barrels and in tons. This article discusses the important elements that make up foreign trade contract work in the fuel business, as well as the use of a letter of credit in oil trading. The purpose of the study is to show in practice the use of a letter of credit and its role in the fuel business. Currently, a small number of scientific papers have been published on the application of a letter of credit in the fuel business. The author concludes that in the fuel business, haste will be a bad helper in the conclusion and execution of contracts. Details that are overlooked, even the most insignificant and unprincipled, can become an obstacle when disclosing a letter of credit.