Petroleum Trading Transaction Types Explained: TTT, TTV, TTO, CIF, and FOB Complete Guide

A seller offers you EN590 diesel via "TTT Rotterdam." Another quotes "CIF Singapore." A third mentions "FOB Houston." If you're new to petroleum trading, these acronyms might as well be a foreign language. But choosing the wrong transaction type can cost you tens of thousands in unnecessary expenses or trap you in logistics you can't handle.

Each transaction type—Tank-to-Tank (TTT), Tank-to-Vessel (TTV), Tank Take Over (TTO), Cost Insurance & Freight (CIF), and Free On Board (FOB)—determines who arranges what, who pays for what, and who bears risk at each stage. This guide breaks down each type so you choose correctly.

Why Transaction Types Matter

Transaction types affect your logistics responsibilities (what you arrange versus what the seller handles), cost structure (what's included versus paid separately), timeline (1-2 weeks for TTT versus 4-10 weeks for CIF), risk allocation (who bears risk at each stage), documentation requirements, payment timing, and complexity level.

Choose wrong and you'll pay tens of thousands in unnecessary expenses, face delays you can't handle, find yourself in situations requiring expertise you lack, or increase your risk unnecessarily.

Choose right and you optimize costs, match your capabilities, minimize risk, and streamline the entire process.

Transaction Type #1: Tank-to-Tank (TTT)

What is TTT?

Tank-to-Tank (TTT) means petroleum product is transferred directly from the seller's storage tank to your storage tank, typically at the same terminal or nearby terminals.

Key characteristic: No vessel involved - product moves via pipeline or truck between tanks.

When TTT is Used

TTT works when both parties have tank storage at the same terminal – for example, product at Rotterdam where both buyer and seller maintain tanks. It's ideal when you need quick transfer (it's the fastest transaction type), plan to resell or store product, or you're conducting local or regional trade within the same port area.

TTT is NOT suitable when you don't have tank storage, when buyer and seller are in different countries or regions, or when you need to ship product long distances.

TTT Procedure (Step-by-Step)

Standard TTT transaction:

1. Agreement - Buyer and seller agree on product, quantity, price, and TTT delivery

   • Timeline: 1-3 days

2. Contract Signing - Sales Purchase Agreement (SPA) signed

   • Specifies tank transfer terms
   • Timeline: 2-5 days

3. Proof of Product - Seller provides POP documents:

   • SGS or inspection report (less than 48 hours old)
   • Tank Storage Receipt (TSR) with GPS coordinates
   • Authorization to Verify (ATV)
   • Authorization to Sell (ATS)
   • Product Passport
   • Timeline: Immediate to 2 days

4. Verification - Buyer verifies product:

   • Contact terminal to confirm TSR
   • Optional dip test
   • Verify SGS report with SGS
   • Timeline: 1-3 days

5. Tank Coordination - Confirm both tanks ready:

   • Seller's tank has product
   • Buyer's tank has capacity
   • Terminal approves transfer
   • Timeline: 1-2 days

6. Payment - Buyer pays after successful verification:

   • Wire transfer (MT103)
   • Payment confirmation
   • Timeline: 1-2 days

7. Transfer/Injection - Product injected from seller's tank to buyer's tank:

   • Terminal facilitates transfer
   • Injection report generated
   • Timeline: 1-2 days for actual transfer

8. Title Transfer - Ownership transferred to buyer:

   • Certificate of ownership issued
   • Transaction complete

Total TTT Timeline: 7-18 days typically

TTT Costs

Included in TTT price:

• Product cost
• Seller's tank storage (until transfer)

Additional costs buyer pays:

• Your tank storage fees (ongoing)
• Transfer/injection fees at terminal ($500-2,000)
• Verification costs (dip test $500-2,000 if done)
• Wire transfer fees ($50-200)

Cost advantage: No shipping costs (major savings vs TTV/CIF)

TTT Advantages & Disadvantages

TTT is the fastest transaction type (complete in 1-2 weeks), cheapest (no vessel or shipping costs), simplest (fewer moving parts than vessel transactions), offers the most control (both parties at same location), and provides flexible timing (store and use when needed).

But TTT requires tank storage access, is location-limited to the same or nearby terminals, incurs ongoing daily storage costs until you move product, and can't work for international long-distance delivery.

Best for traders holding inventory, buyers with terminal tank storage, local or regional transactions, situations needing quick turnaround, and resellers who'll sell from storage.

Transaction Type #2: Tank-to-Vessel (TTV)

What is TTV?

Tank-to-Vessel (TTV) means petroleum product is loaded from a storage tank onto a vessel (ship) for transportation to a destination port.

Key characteristic: Product goes from tank → vessel → destination

When TTV is Used

TTV is ideal for international delivery when buyer and seller are at different ports, large volume shipments, and situations where the buyer has shipping expertise or relationships. Common routes include Houston tank to Singapore, Rotterdam tank to West Africa, and Fujairah tank to India.

TTV Procedure (Step-by-Step)

Standard TTV transaction:

1. Agreement - Terms including FOB or CIF basis

   • Timeline: 1-3 days

2. Contract - SPA specifying TTV delivery

   • Timeline: 2-5 days

3. Proof of Product - Same as TTT:

   • Recent SGS, TSR, ATV, ATS, etc.
   • Timeline: Immediate to 2 days

4. Verification - Product verified at origin:

   • Dip test or inspection
   • Timeline: 1-3 days

5. Vessel Arrangement:

   • If FOB: Buyer arranges vessel
   • If CIF: Seller arranges vessel
   • Charter Party Agreement (CPA)
   • Timeline: 5-14 days

6. Loading Coordination - Vessel arrival and berth:

   • Notice of Readiness (NOR) issued
   • Berth allocated
   • Loading schedule set
   • Timeline: 2-5 days

7. Loading - Product loaded onto vessel:

   • SGS monitors loading (optional)
   • Bill of Lading issued after loading
   • Timeline: 1-3 days for loading

8. Payment (timing varies by terms):

   • FOB: Often after loading, upon BOL
   • CIF: Often after discharge, upon successful Q&Q

9. Shipping - Vessel sails to destination:

   • Timeline: 3-40 days depending on route

10. Discharge - Vessel arrives, product unloaded:

    • CIQ/SGS inspection at discharge port
    • Timeline: 2-4 days

11. Final Payment (if CIF) - After successful discharge inspection

Total TTV Timeline: 3-8 weeks depending on route

TTV Costs

FOB TTV costs:

• Product price (FOB)
• Vessel charter ($50,000-500,000+ depending on size/route)
• Loading fees
• Bunker fuel (if not included in charter)
• Port fees at origin
• Port fees at destination
• Insurance (1-2% of cargo value)
• Bill of Lading fees
• Discharge fees
• Inspection fees

CIF TTV costs:

• Product price (CIF - includes shipping and insurance)
• Discharge fees
• Customs clearance
• Inspection at discharge

Cost difference: CIF typically $20-60/MT more than FOB (includes shipping)

TTV Advantages & Disadvantages

TTV enables international delivery to your country, handles large volumes (10,000-200,000+ MT), uses established trade routes with known procedures, and offers flexible destination options with many available ports.

Downsides: TTV is complex (vessel charter, marine insurance, multiple ports), slow (3-8 weeks total), expensive (significant vessel and shipping costs), carries risk of delays (weather, port congestion, vessel issues), and exposes you to demurrage risk if vessels are delayed.

Best for international purchases, large volumes, end-users importing fuel, buyers with shipping experience (FOB), and buyers wanting simplicity (CIF with seller handling shipping).

Transaction Type #3: Tank Take Over (TTO)

What is TTO?

Tank Take Over (TTO) means buyer purchases ownership of petroleum product already stored in a tank, taking over the tank lease or the specific product allocation.

Key characteristic: Product already in storage; you're buying existing inventory, not waiting for new supply

When TTO is Used

TTO works when you need immediate availability, product is already at your desired location, the seller has distressed inventory, or you're making an opportunistic purchase. Common situations include a previous buyer backing out, sellers needing quick liquidity, or strategic inventory positioned at key ports.

TTO Procedure (Step-by-Step)

1. Opportunity Identified - Seller offers TTO of existing inventory

   • Timeline: Immediate

2. Product Details - Seller provides current storage info:

   • Current TSR (very recent - within days)
   • Current SGS (within 48-72 hours)
   • Tank lease terms
   • Timeline: 1-2 days

3. Verification - Buyer verifies product currently in tank:

   • Contact terminal
   • Confirm product still there
   • Optional current dip test
   • Timeline: 1-3 days

4. Lease Review - If taking over tank lease:

   • Review lease terms with terminal
   • Confirm transfer is permitted
   • Understand ongoing costs
   • Timeline: 2-5 days

5. Agreement - SPA for TTO:

   • Specifies title transfer
   • Tank lease transfer (if applicable)
   • Timeline: 2-4 days

6. Payment - Usually quick payment required:

   • Wire transfer
   • Timeline: 1-2 days

7. Title Transfer - Ownership and control transferred:

   • Terminal notified
   • Buyer becomes controller of product
   • Tank lease transferred (if applicable)
   • Timeline: 1-2 days

8. Ongoing Management - Buyer now responsible:

   • Tank storage fees
   • Insurance
   • Product management

Total TTO Timeline: 7-14 days typically

TTO Costs

Purchase costs:

• Product price (sometimes discounted for quick sale)
• Title transfer fees

Ongoing costs buyer assumes:

• Tank storage fees (daily - $500-2,000/day depending on volume)
• Insurance
• Terminal fees
• Any existing liabilities

TTO Advantages & Disadvantages

TTO offers immediate availability (product ready now), strategic positioning (already at desired location), potentially better pricing (distressed sellers may discount), and fast transactions (complete in 1-2 weeks).

But you assume ongoing storage costs immediately, availability is limited (not always an option), you may inherit the seller's existing tank lease obligations, and due diligence is critical since you must verify the product actually exists.

Best for traders seeking positioned inventory, buyers needing immediate availability, experienced buyers who understand storage costs, and opportunistic purchases.

Transaction Type #4: Cost, Insurance & Freight (CIF)

What is CIF?

CIF (Cost, Insurance & Freight) is an Incoterm where the seller delivers product to the buyer's port and pays for shipping and insurance. Price includes product cost + shipping + insurance.

Key characteristic: All-inclusive price; seller handles logistics; buyer receives at their port

When CIF is Used

CIF is ideal for international purchases when you want simplicity, lack shipping expertise, are a first-time petroleum buyer, or don't have freight forwarder relationships. CIF is one of the most popular terms for petroleum imports precisely because it simplifies the process for buyers.

CIF Procedure (Step-by-Step)

1. Agreement - CIF terms to specific port:

   • "CIF Singapore" = delivered to Singapore, all costs included
   • Timeline: 1-3 days

2. Contract - SPA specifying CIF delivery:

   • Destination port named
   • Timeline: 2-5 days

3. Seller Arranges Everything:

   • Vessel charter - Seller books vessel
   • Insurance - Seller arranges marine insurance (110% cargo value)
   • Loading - Seller coordinates at origin port
   • Timeline: 5-14 days for arrangements

4. Loading - Product loaded onto vessel:

   • Bill of Lading issued to seller
   • Timeline: 1-3 days

5. Shipping - Seller's responsibility until arrival:

   • Seller bears risk during transit
   • Timeline: 3-40 days depending on route

6. Arrival - Vessel arrives at buyer's port:

   • Notice of Readiness (NOR) issued
   • Seller provides shipping documents to buyer
   • Timeline: 1 day

7. Document Transfer - Seller sends to buyer:

   • Original Bill of Lading
   • Commercial Invoice
   • Certificate of Origin
   • Insurance certificate
   • Quality/Quantity certificates
   • Other export documents

8. Discharge Inspection - CIQ/SGS at buyer's port:

   • Quality and Quantity verified
   • Timeline: 1-2 days

9. Payment - Buyer pays after successful inspection:

   • Wire transfer
   • Against presentation of documents
   • Timeline: 1-3 days

10. Discharge - Product unloaded to buyer's facility:

    • Buyer arranges discharge
    • Timeline: 2-4 days

Total CIF Timeline: 4-10 weeks depending on shipping distance

CIF Costs

Included in CIF price:

• Product cost
• Freight (shipping)
• Insurance
• Loading at origin port
• Export documentation

Buyer pays separately:

• Discharge fees at destination
• Import customs/duties
• CIQ inspection at destination
• Final delivery to buyer's facility (if not at port)

Cost comparison: CIF price typically $20-60/MT higher than FOB, but includes shipping worth $20-60/MT

CIF Advantages & Disadvantages

CIF offers simplicity (seller handles all logistics), all-inclusive pricing (know total cost upfront), requires less expertise (no shipping knowledge needed), the seller bears transit risk until arrival at your port, and it's ideal for first-time buyers.

Downsides: less control (can't choose vessel or route), possibly higher cost if you could negotiate better shipping rates yourself, dependence on the seller's shipping timeline, and you're still responsible for discharge and unloading.

Best for first-time petroleum buyers, buyers without shipping relationships, international purchases, buyers wanting simplicity over control, and smaller buyers who can't negotiate competitive vessel rates.

Transaction Type #5: Free On Board (FOB)

What is FOB?

FOB (Free On Board) is an Incoterm where the seller delivers product onto a vessel at the origin port. Buyer arranges and pays for shipping from there.

Key characteristic: Lower product price, but buyer handles all shipping

When FOB is Used

FOB works when you have shipping relationships, want control over logistics, can get better freight rates than the seller offers, handle large regular volumes with shipping leverage, or you're an experienced importer comfortable managing complex logistics.

FOB Procedure (Step-by-Step)

1. Agreement - FOB terms at specific port:

   • "FOB Houston" = delivered to vessel at Houston
   • Timeline: 1-3 days

2. Contract - SPA specifying FOB delivery:

   • Loading port specified
   • Timeline: 2-5 days

3. Buyer Arranges Vessel:

   • Contact ship brokers
   • Charter vessel
   • Charter Party Agreement (CPA)
   • Timeline: 7-21 days

4. Buyer Arranges Insurance:

   • Marine cargo insurance
   • 110% of cargo value typically
   • Timeline: 2-5 days

5. Vessel Arrival - Buyer's vessel arrives at loading port:

   • Notice of Readiness issued
   • Timeline: Per vessel schedule

6. Loading - Seller loads product onto buyer's vessel:

   • Seller coordinates with terminal
   • Bill of Lading issued (to buyer)
   • Timeline: 1-3 days

7. Payment - Often upon Bill of Lading:

   • Buyer pays seller
   • Receives BOL
   • Timeline: 1-2 days

8. Shipping - Buyer's responsibility:

   • Buyer bears risk during transit
   • Buyer pays freight costs
   • Timeline: 3-40 days

9. Arrival - At buyer's destination port:

   • Buyer's responsibility to receive
   • Timeline: 1 day

10. Discharge - Buyer arranges and pays for unloading:

    • CIQ inspection
    • Discharge operations
    • Timeline: 2-4 days

Total FOB Timeline: 4-10 weeks (similar to CIF)

FOB Costs

Included in FOB price:

• Product cost
• Loading onto vessel at origin

Buyer pays separately:

• Vessel charter ($50,000-500,000+)
• Freight/bunker fuel
• Marine insurance (1-2% of cargo value)
• Port fees at origin
• Port fees at destination
• Discharge fees
• Import duties/customs
• Inspection fees

Cost comparison: FOB price $20-60/MT less than CIF, but buyer adds shipping costs

FOB Advantages & Disadvantages

FOB delivers lower product prices (no seller shipping markup), full control (choose vessel, route, timing), better rates if you have volume shipping, direct shipping relationships you can build on, and flexibility to combine shipments and optimize routes.

Downsides: FOB is complex (arrange vessel, insurance, logistics yourself), requires shipping expertise, you bear all transit risk, it's time-consuming to coordinate multiple parties, and it's potentially more expensive if shipping rates are high or you lack volume.

Best for experienced importers, large regular buyers with shipping volume, buyers with freight forwarder relationships, buyers who want full control, and buyers who can secure competitive freight rates.

Comparison: All Transaction Types

Decision Framework: Choosing Your Transaction Type

Step 1: Geography

Question: Where is the product, and where do you need it?

Same terminal/port:

• Consider TTT (if you have storage)
• Consider TTO (if available)

Different countries:

• CIF or FOB (need vessel shipping)
• TTV applicable

Step 2: Your Capabilities

Question: Do you have petroleum trading experience?

First-time buyer:

• Choose CIF (simplest)
• Avoid FOB (too complex)
• TTT okay if you have storage

Experienced buyer:

• FOB might save money (if you have shipping relationships)
• Any transaction type feasible

Step 3: Storage

Question: Do you have tank storage access?

Yes:

• TTT available
• TTO available
• Can receive CIF/FOB then store

No:

• Must use CIF or FOB to direct delivery
• Can't use TTT or TTO

Step 4: Volume and Frequency

Question: How much and how often are you buying?

Large regular volumes:

• FOB might be cost-effective (better shipping rates)
• Consider tank storage for TTT/TTO

Smaller or occasional:

• CIF better (don't have shipping volume for good rates)

Step 5: Control vs Simplicity

Question: Do you want control or simplicity?

Want simplicity:

• CIF (seller handles everything)

Want control:

• FOB (you handle shipping)
• TTT (if local, direct control)

Step 6: Timeline

Question: How urgently do you need the product?

Urgent:

• TTO (immediate availability if available)
• TTT (fastest if storage available)

Not urgent:

• CIF or FOB okay (3-10 weeks)

Common Mistakes to Avoid

Choosing FOB without shipping expertise: Buyers choose FOB to save money but don't know how to charter vessels, get bad freight rates, make insurance mistakes, and end up paying more than CIF would have cost. Solution: Start with CIF and move to FOB after gaining experience.

TTT without understanding storage costs: Buyers do TTT then face $1,000/day storage fees they can't manage, can't move product quickly, and watch storage costs eat their savings. Solution: Calculate total cost including ongoing storage before choosing TTT.

Wrong expectations: Expecting TTT timelines on CIF deals, thinking CIF means free discharge, or assuming FOB includes insurance. Solution: Understand exactly what each transaction type includes and requires before committing.

Not matching type to capability: Small buyers try FOB and can't get good rates. Large buyers use CIF and pay unnecessary markup. Solution: Choose transaction types matching your capabilities and scale.

Hybrid and Variations

CFR (Cost & Freight)

• Like CIF but without insurance included
• Buyer arranges insurance
• Less common in petroleum

DAP (Delivered At Place)

• Seller delivers to specific location (not just port)
• Seller bears all risk until delivery
• Rare in petroleum trading

FAS (Free Alongside Ship)

• Seller delivers to alongside vessel
• Buyer handles loading
• Uncommon in petroleum

For petroleum: TTT, TTV, TTO, CIF, and FOB cover 95%+ of transactions

Bottom Line: Choosing Your Transaction Type

Choose TTT if product and you are at the same terminal, you have tank storage, want the fastest and cheapest option, and plan to resell or store.

Choose TTV if you need international delivery, have shipping expertise, and are handling large volume shipments.

Choose TTO if you need immediate availability, product is already positioned where you need it, and you're comfortable with storage management.

Choose CIF if you're making an international purchase, you're a first-time buyer, want simplicity, or don't have shipping relationships.

Choose FOB if you're an experienced buyer with shipping relationships, want full control, and have large enough volume for good freight rates.

Remember: There's no "best" transaction type – only the right type for your specific situation, capabilities, and needs. Match the transaction structure to your experience level and resources.

Take Action

Ready to source petroleum with the right transaction structure for your needs? Submit an RFQ on CommoditiesHub, specify your preferred transaction type (or ask for recommendations), and connect with verified suppliers who can accommodate TTT, TTV, TTO, CIF, or FOB delivery based on your requirements.