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.
AdBlue AdBlue is a Diesel Emission Reducer that is used in Diesel Combustion Engines to reduce emissions of Nitrogen Oxide (NOx), Sulphur Oxide (SOx) and particulate matter. It is a vehicle requirement in urban low emission zones.
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.
AUS Automotive Urea Solution; a type of AdBlue (see above). AUS32 (with 32% urea content) is an emission reducer for road transport, whilst AUS40 (40% urea concentration) is for marine engines.
Backwardation A market structure where prices for future delivery are lower than today's market price.
BBL Barrel unit of measurement for oil volumes (equivalent to 42 US gallons). The first "B" refers to "Blue" Barrel. This was the colour of original US Oil Barrels in the 19th Century.
Bearish When there is expectation of the market / prices falling.
BFOE Brent, Forties, Oseberg, Ekofisk; the crude oil fields that make up the Brent Pricing Basket.
BOB Blendstock for Oxygenate Blending; products used in the fuel blending process to create gasoline.
BOB / FOC Body of Baywatch / Face of Crimewatch; a man or woman who possesses a fine physique, but has not been blessed in the beauty department.
Book Transfer See Paper Transfer.
BPD Barrels per day; the most common measurement of oil volumes produced.
Bullish When there is expectation of the market / prices rising.
Bullsh1t & Crayons A trading term for the Marketing Department.
Bunker (Int) Marine Fuel Oil sale.
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 (spanning 5,600km) 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.
COCO Company-Owned, Company-Operated; a type of petrol station whereby the oil company owns and runs the garage.
COCOA Old School Hot Chocolate drink.
Contango A market structure where forward prices for future delivery are higher than prompt / spot prices.
CPG (US) Cents per Gallon; how fuel is priced for the consumer in the USA.
CPL Cents per Litre (either Euro cents per litre or Canadian cents per litre); how fuel is priced for the consumer in the EU or Canada.
Crack Spread The difference between the price of crude oil and the price of refined fuels. The bigger the crack spread, the more profitable a refinery is.
CSO Compulsory Stocking Obligation; the obligation on EU and IEA Member States to hold emergency stock reserves (up to 90 days of consumption).
Current Month The first month that is tradeable on commodity markets (also known as Front Month, Spot Month, Near Month or Prompt Month).
Delivered In The price for product delivered direct to the customer (see also CIF).
Derivative Financial instrument based on (derived from) a physical commodity or another financial instrument. An oil futures contract is a derivative of the physical commodity that is oil.
DFA Downstream Fuels Association; a Trade Association representing the interests of independent downstream oil companies in the UK.
DFO Development Fuels Obligation; a sub-obligation of the Renewable Transport Fuels Obligation (see RTFO), which stipulates that a certain percentage of bio-product used to meet RTFO requirements must be made up of developmental fuels i.e. fuels made up from alternative sources such as sustainable waste from non-biological origin.
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.
E-Fuels Synthetic fuels for use in combustion engines, manufactured using captured CO2 or CO, together with hydrogen from sustainable electricity sources such as wind, solar or nuclear power.
Eeh-Ba-Gum Fuels Fuels from Yorkshire.
EN14214 The Euro Standard for Biodiesel to be used in road vehicles.
EN228 The Euro Standard for Mineral Gasoline to be used in road vehicles (ie, straight-run crude oil derived petrol).
EN229 Gasoline with exactly the same spec and performance as EN228, but like a Spinal Tap amp, is one number better.
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.
Ex-Rack Fuel that is picked up at the terminal by truck (rather than "delivered").
FAME Fatty Acid Methyl Ester; the official name for biodiesel blended with diesel to reduce emissions. Unlike the 1980’s hit TV series of the same name, it does not live forever.
Fixed price A fuel price that is held by the seller for longer periods of time and does not change, ie, 1-36 months.
Floating price A fuel price that changes regularly and in line with the spot / daily market price.
FOB Free on Board; the opposite of "CIF" and is the cost of product made available to a buyer that will provide their own transport. Is sometimes referred to as "Ex-Jetty", "Ex-Wharf" or "Ex-Rack".
FQD Fuel Quality Directive; EU directive adopted in 2009 to reduce the greenhouse gas intensity of automotive fuels by at least 6% by 2020 (versus 2010).
FSRU Floating Storage & Regasification Units; advanced LNG carrier that transports and processes Liquified Natural Gas.
Fuel Card A type of credit card that can be used to purchase fuel and other related products at the forecourt.
Gasoil Diesel that can be used for certain off-road purposes only (eg, rail, marine, agricultural). Has a lower duty rate (11.14ppl in the UK) than road diesel (52.95ppl). Also known as Red Diesel.
GHG Greenhouse Gas; Greenhouse gases, such as CO2, trap heat in the earth's atmosphere, causing global warming. In the fuel industry, GHG may refer to the Greenhouse Gas Reduction Scheme; legislation which imposes a carbon emissions reduction target on fuel suppliers in the UK.
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.
GTL Gas to Liquid; Liquid fuel that has the characteristics of (for example) diesel, but is made from natural gas rather than crude oil. It is typically a cleaner and lower emission fuel than standard crude derived fuels.
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 from animal and vegetable waste.
IBC Intermediate Bulk Container; 1,000 litre container with in-built dispensing unit. Used for specialist liquid products such as Portland’s AdBlue (Diesel Emission Reducer).
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).
Midstream The refining sector, ie, the bridge between "Upstream" and "Downstream".
NGLs Natural Gas Liquids; Natural gas that is liquified by cooling. See also "LNG".
NOC National Oil Company; an oil company that is owned by the state (eg, Saudi Aramco in Saudi Arabia or Petrobras in Brazil).
NYMEX New York Mercantile Exchange; subsidiary of CME and the home of the WTI Futures Contract.
OPEC Organisation of Petroleum Exporting Countries; A group of large oil producing nations that collectively agree on oil policy, including production and export quotas. Often accused of being a multi-national cartel.
OPUC A curse or oath uttered by someone with a speech impediment.
PADD Petroleum Administration for Defence Districts; set up in the Second World War (hence "Defence"). Describes the 5 US areas of oil production, refining and distribution.
Paper Cut A disproportionately painful cut, resulting from pushing paper across your desk too fast in the aftermath of a Paper Transfer.
Paper Transfer Transfer of title without physical delivery.
Physical Real and tangible fuel, that can be physically used (rather than "Paper"). Note however, that when Olivia Newton John uttered the words "Let's get physical" in 1981, she was not intending to buy oil.
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.
RMR Rhein-Main-Rohrleitungstransportgesellschaft; mighty Dutch-German oil pipeline carrying a whopping 40m litres per day into the highly populated North-Rhine Westphalia and Hesse regions. Although “Rohrleitungstransportgesellschaft” looks a long word to the English eye, it is actually only the 728th longest word in the German language.
RTFO Renewable Transport Fuel Obligation; UK fuel legislation aimed at implementing the Renewable Energy Directive (RED) for Transport Fuels, which states that certain fuel products must contain a minimum percentage of renewable bio-product (such as FAME). RTFO is scheduled to rise incrementally on an annual basis up to 2032.
Sell Swap A zero cost futures contract whereby a seller is credited if the market falls but must pay if the market rises. Oil producers and sellers typically trade in sell swaps.
Settle Official published price at the end of a trading session. Also known as the Close Price.
SNAFU Situation Normal, All Fnucked Up; US military term, now adopted across the western world to describe the smooth and normal running of things in general.
Sour Crude High sulphur crude, requiring complex refining to generate higher value petroleum products (gasoline, diesel, jet fuel etc). As a result, it is priced at a discount to "Sweet Crudes". Arab Heavy is an example of a sour crude.
Spot Market Market for the immediate or prompt delivery of product.
Spot Price A price given on the spot at any time for a one off purchase. Not a contracted price/margin/rate.
Spread Trading term to describe the difference between 2 prices (ie, a diesel - gasoil spread is the difference in price between diesel and gasoil).
STA Standard Temperature Accounting; a calculation applied to fuel to adjust volumes to a notional 15 Degrees Celsius, thus taking into account the expansion or contraction of fuel depending on temperature
Sweet Crude Low sulphur crude, requiring minimal refining to generate higher value petroleum products (gasoline, diesel, jet fuel etc). It therefore trades at a higher price versus sour crudes. Brent and WTI are examples of sweet crudes.
UCO Used Cooking Oil; waste from restaurants (ie, chip fat and the like) used as the feedstock for UCOME.
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
UKIFDA The UK and Ireland Fuel Distributors Association; trade association representing the interests of independent fuel resellers and distributors across the British Isles.
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
VDA Verband der Automobilindustrie (German Automotive Association); the regulatory body that approves AdBlue (Diesel Emission Reducer) use in road transport. Portland supplies VDA approved AdBlue.
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