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The international purchase and sale of crude oil is a very, very tightly
controlled system. There are various grades of crude oil each having its
own particular characteristics that affect its value. Some countries have
better crude than others, some countries have embargos against the export of
crude oil. Regardless of the origin or quality, contracts for crude oil
are closely held by a small community of traders specializing in petroleum
products. As with the trading of any commodity, trading in oil requires an
expertise that takes a good solid apprenticeship in the field. It requires
trained knowledge in the product itself, along with an understanding of all the
political and international relationships that affect fluctuating prices.
It is not a field for amateurs.
The
Scam: The most common scam is the supposed ownership
of a crude oil contract from an Arabian prince. The scam goes like this:
An offer is made by a person who states that he has a long term relationship
with an Arab prince, and provides the prince's name. Usually the prince is
a "member of the Royal Family." Although the name may be
authentic, one is warned not to attempt to contact the prince. The reason
given for the oil contract's existence is that OPEC supposedly provides a
kickback to the royal family in the form of X number of barrels of crude to sell
at their leisure. The barrels are meted out to various family members to
provide an income for the princes. Okay, that's part one.
Part two is a little more complicated and has to do with the crude being sold at
so much over LIBOR,
PROOF OF FUNDS, LETTERS
OF CREDIT, BACK-TO-BACK
LETTERS OF CREDIT, meetings in Kuwait or Baghdad,
commissions and counter-commissions, Non-Circumvention Non-Disclosure Agreements
(NCND's), shipping agreements, loading agreements, and a bunch of ballyhoo that
goes nowhere and accomplishes nothing. All the fellow who made the
offering wants is for someone to send him a major wad of money for nothing in
return. The attempted scam can cover weeks of phony negotiations and cost
amateur INTERMEDIARIES
hundreds of dollars in phone bills.
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