Locally, it may be so. But when bulk oil moves to receivers around the world, it travels via a fundamental form of transportation: seagoing tankers. The chartering or hiring of these vessels by base oil sellers and traders forms an important part of many transactions.

Unlike other petroleum products, base oils are not a commodity. The trading patterns are wide and complex, and chartering can literally make or break the deal. (There are instances, for example, of base oils being exported to one location, only to be transported back to the original source. Unusual, yes, but not unheard of.) Margins can be made or lost in the freight element of a trade, so it is imperative to know the ropes.

The correct vessel choice is paramount in the base oil business, and whether to elect for stand-alone vessels or parcel carriers (where charters take space rather than hire the whole ship) is a vitally important question. A broker can advise suitability up to a point, and will present the vessel details in full, usually by way of a Q88 document which lists all the relevant details such as ownership, flag, size, age, propulsion, certification and so on.

In the main, base oils move under single-voyage charter parties, but some of the larger players may time-charter or even bareboat-charter a vessel – the bareboat includes no crew or provisions as part of the deal.

For many single voyages, a stand-alone vessel is preferred, particularly if the load port or the disport are not close to the liner routes used by the large oil and chemical carriers which charter out on-board space. These ships offer an assortment of tank receptacles, of varying size and construction.

Some base oils have critical elements which can be affected by the wrong type of containment. White oils for example are very low in color, hence stowage in stainless steel tanks is preferred. On the other hand, API Group I base oils with relatively stable composition and higher color are not so critical, and can go in epoxy-coated or even mild steel tanks, if cleaned to the cargo inspectors standards and scrutiny.

Aside from the basic cost of chartering, which can be in the form of a lump sum or rate per metric ton, many details must be worked into the charter party. Berth and port restrictions, dead weight limits, length and beam, draft, and flat side required alongside are all on the checklist. The vessels age is crucial, too, since this is used as a primary indicator of the ships seaworthiness.

Other items to check: Does the ship carry oil company approvals? Is it single- or double-hulled? How many segregations are on board for different grades of oil, and what is its heating capability (extremely important when shipping high-vis grades such as bright stock)?

Base oils are clean petroleum products (CPP), carried by clean tankers only. The agreement should address the last three cargoes carried, to address any incompatibility of the vessel, its tanks and loading and discharging systems. Otherwise contamination of the cargo is possible, with all its ramifications.

The charter party also has to contain the agreed hours or rate for loading and discharge, and the relevant demurrage should delay or detention occur. When a vessel requires excess hours to load or discharge, these will incur additional costs for the ship, and in turn for the charterer. Laycan, dates offered by owners for the arrival of the vessel, are fundamental parts of the agreement between charterer and operator, and must coincide with the availability of the cargo to load, the necessary berth allocation, etc.

Once a potential charterer has reached an interim agreement with the vessel owner/ operator, it is said to be fixed on subjects, normally for a limited period during which charterers can present the vessel and all pertinent details to the receivers at the discharge port, hopefully gaining their assent for the vessel to lift the cargo and meet any discharge restrictions.

Many owners and their vessels become well known to the regular charterers in the CPP trade. Some charterers will prefer to work only with one or two owners, using one or two shipbrokers. Others will have contact with many shipbrokers in various parts of the world, where local expertise perhaps provides an edge when searching for the right vessel.

Chartering, whilst extremely detailed, is typically not a lengthy procedure, and is standardized to an extent by all shipbrokers. However, it is a particularly important part of any trade or transaction, and can have severe implications if not performed in a professional manner. To that end, it requires specialist attention and application to detail.

Players in the business need to have their eyes and ears to the ground when looking for suitable vessels. Large oil multinationals may have shipping divisions within their companies to tap for this expertise, but the eyes and ears for many others are the worldwide teams of ship-brokers who liaise with owners and operators, and act as the go-between in negotiations between ship owner and charterer.