Fuel and Commodity Trading Due Diligence: 10 Checks Before an LOI or ICPO

Why counterparty verification comes first

In international commodity trading, counterparty verification should begin before an LOI or ICPO is treated as an executable opportunity. In fuel and international commodity trading, a polished website, persuasive intermediary or detailed commercial offer does not prove that a seller controls product or that a buyer can perform. A disciplined qualification process protects time, reputation and transaction costs. FORWARD GROUP treats supplier verification and realistic commercial terms as prerequisites to serious sourcing discussions.

1. Identify the legal seller

Obtain the exact registered company name, jurisdiction, registration number, registered address and authorized signatory. Verify these against independent corporate records where available. Confirm whether the party is the principal seller, a mandate holder or an intermediary.

2. Understand the intermediary chain

Ask who holds the contractual right to sell and who can communicate with the buyer. Multiple brokers may circulate the same offer without a direct relationship to the title holder. Do not mistake repeated introductions for independent supply sources.

3. Verify the product and specification

Identify the exact commodity, origin, technical specification, quality tolerances, volume and delivery location. For crude oil, parameters such as API gravity and sulfur content matter. For refined products, request the relevant grade and specification. Generic descriptions are not a substitute for a transaction-specific offer.

4. Test the seller's ability to perform

Request credible evidence of the seller's commercial role, allocation or access to production, subject to appropriate confidentiality. Independently verify any refinery, terminal or logistics company named in documents using official channels. Avoid treating screenshots or unverifiable letters as proof.

5. Check the company website and communication

Compare the registered entity with the website domain, business addresses and email contacts. A newly registered domain is a risk indicator, not proof of fraud; an old company registration is not proof that the person contacting you represents that company. Confirm authority through independently obtained contact details.

6. Clarify Incoterms and logistics

Confirm whether the proposed structure is FOB, CIF or another Incoterm, the named port, vessel or terminal requirements, inspection point and document flow. A procedure that shifts unexpectedly between structures deserves clarification before a buyer commits.

7. Review payment security early

Discuss acceptable instruments such as documentary letters of credit or other agreed secured payment structures at an early stage. Verify bank-related claims directly through appropriate banking channels. A document mentioning an SBLC or MT message is not itself evidence of available financing.

8. Check sanctions and legal restrictions

Screen counterparties, ownership, vessels, origin and destinations against applicable sanctions and trade restrictions. Regulatory obligations differ by jurisdiction. Obtain qualified legal and compliance advice for the specific transaction rather than relying on a generic online checklist.

9. Confirm buyer qualification

Serious supplier engagement usually requires a credible buyer profile, realistic volume, destination, timeline and payment capability. An LOI or ICPO without sufficient buyer identification or feasible commercial terms may not justify contacting major producers.

10. Establish a documented next step

Before exchanging sensitive documents or spending money on inspections, agree which party must provide which evidence, by when, and what happens if verification fails. Preserve the correspondence and distinguish confirmed facts from claims that remain unverified.

Work with FORWARD GROUP

FORWARD GROUP supports international commodity sourcing, commercial coordination and counterparty due diligence. Buyers with a defined requirement can share the commodity, specification, quantity, destination and proposed payment structure through https://www.forward-investments.com. We evaluate commercial feasibility before treating an opportunity as an active transaction.