How to Verify a Crude Oil Seller — KYC Checklist for Physical Oil Trades

What does KYC mean when you verify a crude oil seller?

Know your customer (KYC) checks are usually discussed from a bank's side. In physical oil trading, the buyer carries the first risk: paying for a cargo that does not exist, or that belongs to a sanctioned party, can mean losing the money and facing enforcement action. To verify a crude oil seller, you need independent evidence on six points: the legal entity, its owners, sanctions exposure, title to the oil, the vessel and the bank.

The guiding principle is independence. Use sources you find yourself, such as official registries, sanctions tools and a terminal's own switchboard, never contact details supplied by the seller. The International Chamber of Commerce's International Maritime Bureau (IMB) urges stringent due diligence on all parties, even established traders, and independent verification of all shipment details on documents ^[17].

How do you check a seller's company registration and beneficial ownership?

Company registry. Start with the registry in the seller's country of incorporation. In the UK, Companies House gives free access to the registered address, incorporation date, current and resigned officers, filings, charges, previous names and insolvency details ^[8]. In Rotterdam, port companies hold a Chamber of Commerce (KVK) number, and the local anti-fraud taskforce warns that a firm unable to give its registration may not be legally registered there ^[19]. Compare the registry entry with the letterhead, email domain and bank account name. Any mismatch needs an explanation.

Beneficial ownership. The Financial Action Task Force (FATF) defines a beneficial owner as the natural person or persons who ultimately own or control a customer; only a natural person can be an ultimate beneficial owner ^[7]. Its revised Recommendation 24, agreed in March 2022, requires countries to give authorities access to "adequate, accurate and up-to-date information on the true owners of companies" ^[6]. Ask for an ownership chart down to individuals and check each layer. The US Office of Foreign Assets Control (OFAC) treats newly incorporated companies, shell companies, special purpose vehicles and escrow agents that obscure the ultimate owner as red flags in shipping deals ^[14].

Authority to sign. The signatory should be a current officer on the registry, or hold a power of attorney or board resolution that you confirm with the company through its registered contact details. Screen signatories too: OFAC notes that US persons may not, for example, enter into contracts signed by a blocked individual ^[2].

How do you screen an oil seller against sanctions lists?

Screen the seller, its owners, officers, signatories, banks and the vessel against four sets of lists, using the official tools:

United Nations. The UN Security Council Consolidated List includes all individuals and entities subject to Security Council measures, with a search tool at search.sanctions.un.org ^[5].

European Union. The EU Sanctions Helpdesk points to the EU Sanctions Map as a first stop, and to the consolidated financial sanctions list of more than 5,000 people and entities, including aliases ^[4].

United Kingdom. Since 28 January 2026 the UK Sanctions List, published by the Foreign, Commonwealth & Development Office (FCDO), has been the only source for all UK designations. The OFSI Consolidated List of Asset Freeze Targets is closed, so screening tools that still use it need updating ^[3].

United States. OFAC's Sanctions List Search covers the Specially Designated Nationals (SDN) List and the non-SDN consolidated lists, and applies fuzzy logic to name searches ^[1].

A clean name search is not the end. Under OFAC's 50 Percent Rule, entities owned 50% or more, directly or indirectly and in aggregate, by blocked persons are considered blocked themselves, and OFAC urges caution even below that threshold ^[2]. Map ownership first, then screen, and save a dated record of every search, including "no match" results.

How do you verify title to the oil and the storage?

Title is where most frauds collapse. A UK P&I Club bulletin relaying IMB warnings puts it plainly: "proving a cargo is onboard a vessel is an entirely different matter than proving the ownership of that cargo" ^[17]. Ask for the chain of title back to the producer or refinery, and check each transfer.

For oil in tanks, verify directly with the terminal, using contact details you find yourself. The Port of Rotterdam Authority describes "storage spoofing" as selling non-existent storage and stocks through fake websites that impersonate well-known terminal companies, backed by forged documents. Its taskforce keeps a blacklist of more than 1,250 fraudulent domains and a whitelist of safe sites ^[18].

The taskforce says a genuine Rotterdam offer should come with an official quality and quantity inspection report from an inspection company working in the port, such as SGS or Intertek, plus an injection report from the storage company. Any request to pay for an "Authorization to Verify" storage capacity or a "Dip Test Authorization" is "wrong by definition" ^[19]. Appoint your own inspector through the inspection company's official channels, and confirm any certificate number with the issuer.

How do you check the vessel? IMO number, Equasis and AIS

IMO number. Under the SOLAS convention, a ship's IMO number ("IMO" plus seven digits) must appear on its certificates and be permanently marked on the hull. It never changes, even when the name, flag or owner does. Registered owners and managers have permanent IMO numbers too ^[10]. In July 2026 the ICC published vessel-checking guidance for trade finance that recommends promoting mandatory IMO numbers on bills of lading ^[16].

Equasis and class. Run the number through Equasis, a free database (registration required) covering more than 85,000 ships, whose management unit is hosted by the European Maritime Safety Agency (EMSA) ^[12]. It shows name, flag, owner and class history, port state control inspections and detentions, and P&I club data where supplied, but not live positions ^[11]. The International Association of Classification Societies (IACS) offers a free "Vessels in Class" search, updated weekly, and refers users to each society's register for official confirmation ^[13].

AIS and voyage history. Compare the documents with the ship's actual movements using Automatic Identification System (AIS) data. OFAC's warning signs include long AIS gaps, a tanker reported as another ship type, abnormal voyage patterns, and falsified certificates of origin or bills of lading ^[14]. Its April 2025 guidance on Iranian oil adds ships broadcasting a scrapped vessel's IMO number, frequent flag changes, and successive ship-to-ship (STS) transfers, which it calls "a strong risk factor for sanctions evasion". It suggests checking the IMO's Global Integrated Shipping Information System (GISIS) for "FALSE" or "UNKNOWN" flags ^[15].

How do you verify the seller's bank and payment terms?

Bank checks should run bank to bank, not through PDFs. Ask your own bank to confirm, through its normal interbank channels, that the seller's account exists in the seller's name and that any instrument cited was genuinely issued. Check that the seller's bank actually does trade finance. In one case, the ICC Financial Investigation Bureau (FIB) flagged a suspicious oil deal worth about $30 million: the intermediary bank focused on wealth management, and the documents carried typing errors and contact details that did not match the named oil company's real ones ^[20].

Prefer structures that release money only against verified documents, such as a documentary letter of credit under the ICC's UCP 600 rules, now with a digital supplement, eUCP version 2.1 ^[9]. Treat any emailed change of bank details as suspect until confirmed by telephone on a number you already hold.

KYC checklist for physical oil trades

Keep a dated file for each counterparty, retain it as long as your regulators and contracts require, and refresh the checks before each cargo, because sanctions lists change constantly.

• Company registered and active, with one name across letterhead, email domain and bank account ^[8]
• Beneficial owners identified down to natural persons ^[7]
• Signatory confirmed as a current officer or authorised attorney, and screened ^[2]
• Seller, owners, officers, banks and vessel screened on UN, EU, UK and US lists, with the 50% rule applied ^[1,3,4,5]
• Chain of title documented back to the producer or refinery ^[17]
• Storage confirmed by the terminal, contacted independently ^[18]
• Independent inspection booked by the buyer; no fees paid for "verification" or dip tests ^[19]
• IMO number checked in Equasis, and class confirmed with the classification society ^[11,13]
• AIS history consistent with documents, with no unexplained gaps or STS transfers ^[14,15]
• Bank account and instruments confirmed bank to bank; payment against documents only ^[9]
• Every check recorded, dated and repeated before each cargo

Alupetra provides KYC and due diligence support for physical energy trades from its Istanbul, London and Dubai offices.