Greek economic worries lead to re-assessment of oil trading terms

Chemical News: Greek economic worries lead to re-assessment of oil trading terms

https://www.chemnet.com Jul 22,2011 Platts
Economic uncertainty in Greece has lead to a shift in trading relationships some companies are having with Greek companies, trading sources said Thursday.

Oil is traded in a number of ways including with open credit lines and also with letters of credit supported by banks.

The economic uncertainty has lead to some companies shifting away from having fully open credit relationships and moving some deals towards letters of credit, sources said.

"I think people are a bit more careful about open credit...the situation is not good, there are probably some back office people warning traders," a trader of refined oil products in the Mediterranean said.

This was echoed by another products trader who said that there has been a shift away from open credit.

A source at a Greek oil refinery said it was not the case that all companies no longer had open credit but said that it depended on the company, adding that it was now more difficult to have open credit.

He gave the example that if there were three or four cargoes purchased, some could now be with a letter of credit rather than all of them being bought through open credit.

"Things have changed, but not dramatically," he added.
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