The Ultimate Guide To Starting A Crude Oil Brokerage Business (Crude Oil Selling) In Nigeria And Africa

How To Start A Crude Oil Brokerage Business In Nigeria And Africa
How To Start A Crude Oil Brokerage Business In Nigeria And Africa

The global demand for crude oil has only continued to climb over the years. From the 1800s till now, this commodity has been the major source of income for many nations, oil & gas organizations, and even crude oil brokers.

In Nigeria, it is the holy grail of the country’s economy. A shift in its global price sends the nation nose-diving into a recession. But despite this, the country has a crude oil production capacity of about 2.5 million barrels a day, leaving Nigeria as Africa’s largest producer of crude oil and the sixth largest producer in the world.

The implication of these figures show that Nigeria’s excessive crude oil deposit and extraction activities have created a major business opportunity for people who intend to venture into the crude oil brokerage business in the country.

By far, crude oil brokerage is one of the most profitable oil and gas segments for entrepreneurs who have no money to venture into the trade. Since it involves arranging a transaction for a commission of about $1 per barrel, it makes it an excessively lucrative venture for crude oil brokers who land major crude oil supply contracts.

See Also: How To Find Real Crude Oil Sellers And Buyers In Nigeria


First, What Is Crude Oil Production About?

According to the, “Crude oil production is defined as the quantities of oil extracted from the ground after the removal of inert matter or impurities.”

This mineral oil is usually between yellow to black in colour, contains a mixture of hydrocarbons, and has a variable density and viscosity.

See Also: How To Buy Crude Oil From Nigeria: Complete Guide For Buyers And Sellers


So What Is Crude Oil Brokerage About?

Crude oil brokerage is the arrangement of a transaction between a crude oil buyer and a crude oil seller for a commission when the deal is executed. A crude oil broker who acts as a seller or buyer becomes a principal party to the crude oil transaction.

Here, the broker initiates the deal between a crude oil buyer, which is mostly an oil trader or refinery, and the crude oil seller, which in this case, is the company buying from the Nigerian National Petroleum Corporation (NNPC) to resell to the international buyer, or the oil regulatory body of the country you reside in.

See Also: How To Start A Commodity Brokerage Business From Anywhere Around The World


Facts Of Crude Oil Brokerage

  • You’re only brokering a transaction between a crude oil buyer (oil trader or refinery) and a crude oil seller (the company getting crude oil from the NNPC).
  • The buyer would be asked to show proof of finance before shipment is made.
  • The crude oil broker is paid about $1 per barrel sold by the crude oil seller.
  • You can venture into crude oil brokerage by partnering with a person who has an allocation from the government or that buys on OFF-OPEC basis.
  • As a crude oil broker, you can venture into this business with $0.
  • Nigeria produces one of the most demanded crude oil in the world: Bonny Light Crude Oil (BLCO).
  • Some other crude oil products in Nigeria include Qua Ibo, Escravos blend, Brass River, Forcados, Pennington Anfan, and over 15 more light crude oils.
  • Crude oil is measured in barrels.

See Also: How To Find Real AGO Sellers And Buyers In Nigeria


Business Opportunities In Crude Oil Brokerage

Before venturing into the crude oil brokerage business in Nigeria or Africa, there are some terminologies you must know, which also defines the various opportunities within the petroleum sector with respect to crude oil trading. These includes:

1). Free On Board (F.O.B):

In this situation, the crude oil seller will load the vessel with the petroleum products and cover the cost of clearance, while the crude oil buyer will cover the cost of transportation after making payment. This is the model the Nigeria National Petroleum Corporation (NNPC) uses to handle crude oil sales from everyone.

2). Tanker Take Over (T.T.O):

In this situation, the crude oil buyer takes over the hiring of the vessel and all the products onboard.

3). Tanker to Tanker Transshipment (T.T.T):

In this situation, the crude oil buyer will hire their own vessel, then use it to tranship the products from the crude oil seller’s vessel.

See Also: 45+ Off-OPEC Frequently Asked Questions & Answers By Crude Oil Buyers In Nigeria


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Setting Up Your Crude Oil Brokerage Business

Step 1: Register A Company

Before you venture into the crude oil brokerage business, you should first register a company. By doing this, you form a legal structure that separates your personal liabilities from your business’s.

Step 2: Identify A Firm With Crude Oil Allocation Or That Purchases On PLR Basis

After registration, partner up as a broker with a company who already has a crude oil allocation from the NNPC. Having a crude oil allocation means you have a fixed allocation issued to you for a fixed amount of time. This could mean having 20 million barrels of crude oil allocated to a business for a period of one year.

The largest problem the industry faces is most allottees don’t have the funds to even fulfil their allocations, and as a result, are always welcoming crude oil brokers who are ready to trade through their allocations for a commission.

Another way is to broker for companies who sell on OFF-OPEC basis. Those who legitimately do this purchase the crude oil on Provisional Lifting Rights procedures, at a discount, and ship to the crude oil buyer at a discount.

Step 3: Find A Crude Oil Buyer

After forming a partnership with a crude oil seller, the next step is to find a crude oil buyer. Organizations who buy crude oil products are oil traders and refineries, and as a result, are constantly on the lookout for companies that can meet up to their supply needs.

You can reach out to them via their company’s phone numbers, emails, LinkedIn, or even via recommendations.

See Also: How To Find International Buyers For Your Import/Export Business

Step 4: Link Them To The Crude Oil Seller

Now you’d need to ensure they send a Letter of Intent based on what has been realistically agreed, and it should be addressed to the crude oil seller through your company. After which the crude oil seller could either send a Corporate Offer or send the final contract.

Step 5: Crude Oil Seller Ships The Oil To The Crude Oil Buyer

Now the crude oil seller would purchase the crude oil from the NNPC on FOB terms and ship the oil to the crude oil buyer anywhere they are in the world.

Step 6: You Are Paid About $1 Commission Per Barrel Sold

After shipment is complete and the crude oil seller has received payment, depending on your agreement with the crude oil seller, you could earn up to $1 per barrel, which the company would then credit your company’s bank account. If your banking coordinates were listed in the contract, the crude oil buyer would also pay your commissions directly.

The interesting part of the crude oil brokerage business is most supplies are always in millions of barrels. So if your transaction covered 1 million barrels of crude oil, for instance, the crude oil buyer would pay about $1 million Dollars in commissions, since commission could be around $1 per barrel. Since there’s usually a total commission of about $4 to be paid in every transaction, if you’re not in a long list of brokers, you could earn up to $1 per barrel, making it a full $1 million Dollars.

If you’re lucky enough, you could get a much larger contract that covers a monthly supply to the crude oil buyer for a period of time, possibly running into years.

The high returns from this venture make it one of the most profitable oil and gas business opportunities in the world because as a crude oil broker, you only require $0 to run your operations.

See Also: Everything You Need To Know About Crude Oil Marketing In Nigeria: Terms, Laws, Questions, And Answers


Challenges Of The Crude Oil Brokerage Business

1). It’s difficult to find real OFF-OPEC crude oil sellers that will agree to reasonable transaction procedures.

2). Your time could be wasted as a result of long-term conversations with refineries who have no real money to pay.

3). Getting a real crude oil buyer to show a Proof of Finance (POF) can be difficult because most of them can’t secure the credit facility they need to enable them to purchase crude oil

4). The large pool of fraudsters and illiterates posing as crude oil brokers makes it difficult for crude oil buyers to trust you.

5). You could easily get circumvented by the crude oil seller and crude oil buyer.

See Also: 14 Things That Kill Crude Oil Marketing Transactions In Nigeria



The crude oil brokerage business is an oil and gas business where success is heavily based on having a wide network, carrying out smart marketing, and being trustworthy & knowledgeable through the entire process. By building a strong reputation and always delivering on your promises to your clients, you’d succeed a whole lot easier.

See Also: How To Start A Diesel Supply Business In Nigeria: The Complete Guide


What are your thoughts on this complete guide on how to start a crude oil brokerage business in Nigeria? Let me know by leaving a comment below.


This article has been updated for better clarity of content


An Important Point

Trying to buy crude oil from Nigeria through genuine sellers can lead to a lot of wasted time and efforts on the part of the crude oil buyers. They spend a lot of time vetting crude oil sellers in Nigeria, doubting their results even if positive, and going back and forth too many times than they can count, only to end up either cancelling their decision to buy or making a purchase after months or years have passed.

Since finding genuine crude oil sellers in Nigeria is a problem, it is always wise for a crude oil buyer to use a Nigerian organisation as its representative, so they can be on the ground and help the crude oil buyer make better calculative decisions.

To make this possible for crude oil buyers, Startup Tips Daily Media, through her sister company, Globexia, can help genuine crude oil buyers facilitate crude oil purchases from Nigeria.

Whatever position that helps crude oil buyers in Nigeria to close genuine crude oil transactions fast, transparently, and easier, we can make the process as stress-free as possible.

If you’re a genuine crude oil buyer, crude oil buyer mandate, crude oil seller, or crude oil seller mandate, you can reach out to us through the contact form below. If you’d like us instead to represent your interests as your crude oil seller mandate or crude oil buyer mandate, we’d be glad to do so.

We also offer a thorough in-depth due diligence service on exporters in Nigeria.

In addition to our crude oil facilitation business in Nigeria, we’re also AGO sellers in Nigeria (diesel suppliers in Lagos), and can supply AGO to tank farms, private or government organizations in Nigeria, or to countries like Cameroon, Ghana, and more, in the West African coast, while remaining willing to also represent your interests as your AGO buyer mandate or AGO seller mandate.

If you’re only a scam, don’t waste your time, as the conversation wouldn’t last too long after a few questions and demands to prove your authenticity have been made from our end.


Professional Due Diligence Checks In Nigeria By Globexia

International buyers are always wary of doing business with Nigerian based businesses because of the high risk of disappointments either in the form of time wasted or money lost, and as such, are highly sensitive of any organisation that presents them a trade offer.

To curb this problem and help international buyers make comfortable and confident trade decisions, Startup Tips Daily, through her sister company, Globexia, has set up an in-depth due diligence check consulting service that will help international buyers get in-depth information on any organisation looking to do business with them. Some of the information the international buyers stand to gain from the in-depth due diligence exercise that will be carried out by Globexia’s team of experienced lawyers in Nigeria are:

  • Verification of Company Registration
  • Verification of Export Licence
  • Verification of Export Activity
  • Verification of Past Certificates of Origin
  • Verification of Past & Present Bill of Ladings
  • Verification of International Passport / Driver’s Licence of The Exporter
  • Verification of Bank Verification Number (BVN)
  • Verification of Tax Documents
  • Verification of Financial Health of The Company
  • Verification of Mining Licence
  • Physical Verification of Office Address With Pictures & Videos
  • Physical Verification of Mining Site With Pictures & Videos
  • Full List of Registered Company Directors

And much more based on the client’s requirements.

You can read more about the service here.

If you simply want general commodity trade consulting in Nigeria spanning through Due diligence & proper verifications of both parties, understanding the entire Nigerian commodity trading industry, identifying and completing all due trade registrations, clearing & forwarding of the commodities, market research/feasibility study reports, and much more, Globexia Limited is the right partner to talk to.


We look forward to hearing from you.

You can reach us through the contact form below.

Thank you.

Contact Us

If you have any questions, inquiries, or need help or consulting regarding the import/export business, commodity trading, or any aspect of international trade as a whole, you may contact us by sending an email directly to [email protected] or Calling/WhatsApping 2348080888162.

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Startup Tips Daily Media

Lagos, Nigeria

Phone: 234 808 0888 162

Email: [email protected]

Stan Edom
Stan Edom
I'm an entrepreneur with expertise in supply chain management, international trade, small business development, e-commerce, internet startups, renewable energy, and agriculture. I'm also a network engineer, I.T security expert, and computer programmer. In my spare time when I'm not working out at the gym, I try to solve problems people face in their everyday lives with whatever means necessary.

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  1. Thank you so much Stan for the quality of your right-up and the insight. I will like to give this a short.
    First, is registering Business name(an Enterprise as called by CAC) enough or do I have to incorporate.
    As getting proof of finance may be difficult, am asking if supplying the buyer by TTT(that is the bring their tank to Nigeria and buy) may remove the need of POF as requested by NNPC. Or is their any other way to mitigate the POF because the finance involved is much.
    Also the profit involved are quite much. Are you exaggerating?

    • Hi Jude,

      Thank you for the commendation.

      1). You don’t need a license to run a broker business. All you need is links to a person with crude oil allocation and a refinery.

      2). Concerning TTT, I’m not quite sure on that. But FOB is the most common practice.

      3). Before attempting to link up a buyer, you’d need them to raise a Bank Guarantee, which you’d use to get finance from a financial institution, which would then be presented as the proof of finance to the NNPC.

      4). The figures aren’t exaggerated. They are precisely what it is. Every linkage with the NNPC comes at a minimum of $1 compensation per barrel, paid to the person with an allocation that initiated the transaction. If you source clients for an allottee who can provide POF to the NNPC instead, you could negotiate 10 to 30 Cents per barrel. Depending on the number of people running through the deal, the percentage could be lower.

      Thank you for asking.

  2. Thanks Stan for your quick response. I am encouraged. I have seen the 39 list of companies(off-takes as it is called) with crude oil allocation for 2017. They include Oando, Master Energy, Eterna oil and gas, North-West ect(correct me if I am wrong). Is their a special format for mailing this off-takers or the simple formal inquiry and request will do cause you know Nigeria, the security men wont let you pass the flowers talk more of the gate. The OFF-OPEC private offer market is quite interesting its worth looking into I guess.
    Anyway my Journey has started wish me good luck.

    • Hi Jude,

      I’d advise you find a way to reach out to their procurement officers.

      An email would suffice, but an introduction would be better.

      Thank you for asking.

  3. Hello, thanks for the detailed post. I emailed you concerning a crude oil allocation but I still haven’t gotten a reply from you. Please kindly reply my mail let’s take it from there. Thanks.

    • Hi Jennifer,

      I believe I may have replied your email.

      If I haven’t, do resend so I can reply to it.

      Thank you.

  4. Thank for all this free article on crude oil brokerage business, I want know how to partner with a crude oil allocation company in Nigeria, and a format on how to write a letter to crude oil buyers. I look forward to here from you

    Thank you

    • Hi Umo,

      You’d need to determine whether you intend to partner with an OPEC or OFF-OPEC seller.

      Thank you for asking.

  5. Hey Stan, stan I need your help I am trying to get my feet in the door of the crude oil business and I need you to guide me along the way. I need you to be my mentor is that a yes thanks Stan

  6. Good day,
    Thank you for the enlightening posts.
    I don’t know if you can assist to procure buyers for BLCO.whatever quantity is required can be made available.

  7. Dear Sir, I am a Broker, trying to conclude on a crude oil transaction. I need your advise as regards to receiving my commission wired into my GTBank dollar account. It is an off-OPEC transaction. Please what kind of documentation do I need to show to my bank for the commission to be cleared successfully. The commission is $1.00 per barrel for 1 million barrel spot. I am skeptical about the CBN-FG foreign exchange/international transfer policy, as I don’t want my funds to be ceased or blocked.

  8. Good day,
    Please is there Cost of insurance and freight involved, or will that be handled by the seller.

  9. Hi Edom,
    I need information on any genuine OPEC/OFF-OPEC seller who can deliver.
    Sincere rgds
    Francis Adeyemi

  10. Hi Stanley, thanks for providing us with insights and enlightment on crude business. As a broker in the system, I have buyers making enquiries already and wouldn’t mind if you can work in hand in assisting me to linking up trusted suppliers with good reputations. I hope you’d help in that mentor aspect as that can go a long way to help me suspect and possibly shun events relating to fraudulent acts. Thanks

  11. Thank you Edom. I have been searching for such information thank you I gotten something now.
    First I have to register a company for the broker business.

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