Jargon Buster

Our Jargon Buster aims to shed light on the "smoke and mirrors" terms and acronyms commonly used in the oil sector. If you would like clarification on any of the definitions below, or if you have a question about the oil market, please feel free to contact us.

Jargon/Acronym Translation
$/BBL Dollars per Barrel; the price of crude oil is measured this way
10ppm 10 parts per million; normally referring to the sulphur content of fuel
AD Authorised Distributors; Fuel distributors that operate under an oil major brand
Ambient / Measured A measurement of fuel based solely on the volume loaded and with no correction made for temperature (see Standard Temperature Accounting)
API American Petroleum Institute; trade association for the US Oil Industry. Also responsible for fuel standards in the US
ARA Amsterdam / Rotterdam / Antwerp; the hub ports of the North-West Europe Trading market - still the largest in the world
Arbitrage The difference in price of a commodity in different geographies, ie, a diesel arbitrage between Rotterdam and New York means there is an opportunity to buy product in Rotterdam, ship it over the Atlantic to NY and then sell it for a higher price
Argus A fuel price reporting agency that post live market prices and market analysis
ASCI Argus Sour Crude Index; one of Argus' pricing benchmarks for sour grades of crude oil
Backwardation A market structure where prices for future delivery are lower than today's market price
Bunker (UK) When fuel is bought (electronically) on account, which can then be picked up at a forecourt via a fuel card
Buy Swap A zero cost futures contract whereby a buyer is credited if the market rises but must pay if the market falls. Oil consumers and buyers typically trade in buy swaps
Call A trading option, whereby the customer gets paid if the price rises above a certain price, but pays nothing if the price falls below that price. It is the opposite of a "Put" and like most options, it incurs an upfront premium (to be paid by customer)
Capped Price The price at which the customer gets paid as part of a Call Option
CEPS Central European Pipeline System; the series of pipelines for the transportation of oil in the central European area
CIF Cost of Cargo, Insurance & Freight; this is the "delivered-in" cost of goods
Close Official published price at the end of a trading session. Also known as the Settle Price
Cloud Point The temperature at which when cooled, wax in diesel fuel becomes cloudy. Cloudy diesel can damage fuel filters
CME Chicago Mercantile Exchange; a global exchange where traders can buy and sell commodities and their derivatives
CNG Compressed Natural Gas; gas that is compressed to reduce its volume and thus make transportation and storage easier
DFA Downstream Fuels Association; a Trade Association representing the interests of independent downstream oil companies in the UK
DME Dubai Mercantile Exchange; similar (but smaller) exchange to the CME
DODO Dealer-Owned, Dealer-Operated; a type of petrol station that has an Oil Major brand (BP, Shell etc) but is independently owned and operated
Downspondent A curious mix of the words "downhearted" and "despondent", frequently used by Coryton Refinery Operators (Essex, UK) in the early 1990's
Downstream The sector of the oil industry that involves the distribution and sale of refined oil products
EN14214 The Euro Standard for Biodiesel to be used in road vehicles
EN229 The Euro Standard for Mineral Gasoline to be used in road vehicles (ie, straight-run crude oil derived petrol)
EN590 The Euro Standard for Mineral Diesel to be used in road vehicles (ie, straight-run crude oil derived diesel)
ESPO East Siberian Pacific Ocean Pipeline; a pipeline system for exporting Russian crude oil to the Asia-Pacific markets (Japan, China and Korea) - built and operated by Russian pipeline company Transneft
EU ETS EU Emissions Trading Scheme; EU initiative to incentivise the reduction of CO2 emissions, by crediting those companies generating CO2 reductions and allowing them to sell credits to those companies that generate excess CO2
GPSS Government Pipeline & Storage System; strategic underground pipeline network, that connects UK Refineries, Import Terminals, Fuel Depots and Airports. So strategic, it was sold to the Spanish in 2015
Hedge A method of protecting against adverse price movements in a market. The taking of a Fixed Price to protect against Floating Price movements. Also known as Fuel Price Protection
(B)HMF (Big) Hairy Mother Fnucker; an affectionate term used by land-based staff for offshore oil rig workers
HVO Hydrotreated Vegetable Oil; premium form of biodiesel made by www.neste.com
ICE Intercontinental Exchange; global exchange rivalling CME and home of the Brent Futures Contract
Jet A1 Jet fuel for planes; A form of kerosene
LNG Liquified Natural Gas; gas that has been liquified for ease of transportation and storage. Liquification achieves a significantly higher reduction in volume than gas compression (see "CNG")
LOOP Louisiana Offshore Oil Port; offshore oil port designed to take crude imports from the very largest of tankers, that are too big to dock in US Gulf Coast Ports
LTO Light Tight Oil; the high quality, low sulphur oil shale oil extracted by hydraulic fracturing (fracking) in North America
Marine Fuels Gasoil 0.1%, Fuel Oil 1%, Fuel Oil 3.5%; the grades of fuel used in shipping (ie, ship engines rather than ship cargo)
PPL Pence per Litre; how fuel is priced for the consumer in the UK
PRA Petroleum Retailers Association; UK trade association representing the interests of petrol retailers (i.e, petrol stations and forecourts)
Prompt Referring to an immediate sale price or delivery
Put A trading option, whereby the customer gets paid if the price falls below a certain price, but pays nothing if the price rises above that price. It is the opposite of a "Call" and like most options, it incurs an upfront premium (to be paid by customer).
RBOB Reformulated Blendstock for Oxygenate Blending; the official trading name of petrol / gasoline on futures markets
RDCO Registered Dealers in Controlled Oils; an HMRC duty scheme aimed at identifying sellers of Gasoil (Red Diesel) and therefore, payers of lower duty levels in the UK
REA Renewable Energy Association; trade association representing renewable energy producers in the UK
RED Renewable Energy Directive; Energy legislation set by the European Commission and aimed at reducing carbon emissions within the energy sector
Red Diesel So called because of the red dye that is added to show that a lower duty rate has been paid on the fuel. Also known as Gasoil
RTFO Renewable Transport Fuel Obligation; UK fuel legislation aimed at implementing the Renewable Energy Directive. (RED) for Transport Fuels. As of April 2018, all fuels in the UK will have a 7.25% bio content
UCOME Used Cooking Oil Methyl Ester; type of biodiesel made from used cooking oil and the result of esterification (refining process)
UKCS UK Continental Shelf; area of North Sea where oil exploration and extraction takes place
UKPIA UK Petroleum Industry Association; trade association looking after the interests of the oil majors and refiners in the UK
ULSD Ultra Low Sulphur Diesel; UK specification of diesel for road use (see also EN590)
ULSP Ultra Low Sulphur Petrol; UK specification of petrol (see also EN228)
Upstream The part of the oil industry focussing on the exploration and extraction of crude oil
VOC Volatile Organic Compound; a fancy word for hydrocarbons, which is a fancy word for petrol and diesel
Volatility In trading terms, this describes a market that is experiencing significant or rapid fluctuations in prices. In the refining and distribution sector, it describes flammable products such as gasoline or naphtha
WCS West Canadian Select; Low quality, high sulphur crude oil, originating in Alberta, Canada
WTI West Texas Intermediate; high quality, low sulphur crude oil originating in West Texas