Course 14 of 20 · Crude Oil Desk Academy

Arbitrage and Delivered Netbacks

Stage D, Risk and money. Level 7 of 10.

Full delivered-cost construction, arbitrage evaluation, and the place of freight and timing in that decision.

124 chapters · 11 modules · every chapter one 8 to 10 minute explainer · builds on: Course 03, Course 10, Course 12, Course 13

Enrol or enquire See the 124 chapters
How a chapter is sized

One chapter is one idea taken to the point of use

Each chapter is a single self-contained explainer of 8 to 10 narrated minutes, covering one idea to the point where you can use it.

Chapters run in order. Each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

11 modules · 124 chapters

Open any module for its full chapter list, in teaching order.

M0 The Arbitrage Question Ch 1-10
  1. What an Arbitrage Decision Actually Asks
  2. Why the Cargo Price Decides Almost Nothing
  3. Delivered Cost and Netback as Mirror Calculations
  4. The Three Commitments That Must Land Together
  5. Who Evaluates an Arbitrage and Why They Disagree
  6. Open, Closed and Marginal: the Working Vocabulary
  7. A Screen Number Is Not a Trade
  8. Every Component Needs a Date Beside It
  9. The Shape of the Cost Stack
  10. What You Will Be Able to Build by the End
M1 The Cargo Price Layer Ch 11-21
  1. Pinning the Origin Price to a Dated Quotation
  2. Term Allocation Cargoes Inside the Build
  3. Spot Parcels and the Negotiated Component
  4. Pricing Period Mismatch Between Load and Discharge
  5. Which Volume Figure the Cost Divides By
  6. Operational Tolerance and the Cost Per Barrel
  7. Loss Allowance as a Cost Line
  8. Units, Density and the Conversion Trap
  9. Currency and the Cost of Exchange
  10. Provisional Invoicing and the Opening Cash Outflow
  11. Assembling the Cargo Price Layer: Worked
M2 Freight as a Market Ch 22-34
  1. Who Supplies Tonnage and How They Think
  2. Vessel Classes and the Parcel Size Decision
  3. Worldscale: the Flat Rate and the Percentage
  4. Turning a Percentage Into Dollars Per Barrel
  5. Lumpsum Freight and When It Is Quoted
  6. Time Charter Equivalent and the Owner's Indifference Point
  7. Why Routes Price Differently From One Another
  8. Bunkers and the Fuel Cost Inside the Rate
  9. Canal, Strait and Transit Charges
  10. Port Dues, Agency and Terminal Charges
  11. Lightering, Ship to Ship and Part Cargoes
  12. Freight Rate Risk Inside a Movement
  13. Pricing a Voyage End to End: Worked
M3 Time Inside the Economics Ch 35-45
  1. Voyage Duration as the Spine of the Calculation
  2. The Load Window and the Arrival Window
  3. Speed, Slow Steaming and the Cost of Haste
  4. Queues, Congestion and Waiting at Both Ends
  5. Demurrage Exposure as an Expected Cost
  6. The Full Cycle From Nomination to Discharge
  7. Computing a Movement for the Wrong Month
  8. Price Exposure Over the Days at Sea
  9. Optional Destinations and the Value of Flexibility
  10. Diversion Economics Once the Vessel Has Sailed
  11. Two Voyage Timings Compared: Worked
M4 Money, Cover and Charges Ch 46-57
  1. Counting the Days the Cash Is Out
  2. Interest Cost Per Barrel Over a Voyage
  3. Which Facility Funds Which Leg
  4. Cargo Insurance and Who Carries It
  5. War Risk, Deviation and Additional Premium
  6. Measured Losses Between Load and Outturn
  7. Import Duty, Levies and Preferential Regimes
  8. Destination Taxes and Statutory Charges
  9. Discharge, Storage and Onward Movement
  10. Inspection, Survey and Laboratory Costs
  11. Counterparty Credit Cost Priced Into the Build
  12. The Complete Line Item Sheet
M5 Quality in the Comparison Ch 58-68
  1. Why Cost Per Barrel Is the Wrong Comparator
  2. Cost Per Unit of Delivered Value
  3. Reading an Assay Into a Destination Netback
  4. Sulphur and the Penalty the Destination Applies
  5. Density and What It Does to the Landed Result
  6. Acidity, Metals and the Processing Constraint
  7. Yield Weighting the Landed Barrel
  8. Gross Product Worth as a Netback Ceiling
  9. Product Price Basis at the Discharge Market
  10. Normalising Two Grades Onto One Basis
  11. Quality Inside a Landed Comparison: Worked
M6 The Arbitrage Decision Ch 69-81
  1. Stating the Open or Shut Test as Arithmetic
  2. The Movement as a Spread Between Two Netbacks
  3. The Marginal Barrel and Who Sets the Level
  4. What Shuts a Route That Was Open Yesterday
  5. Where the Marginal Buyer Sits
  6. Reading the Curve Into the Decision
  7. Breakeven Freight for a Given Differential
  8. Breakeven Origin Level for a Given Freight
  9. Which Input Moves the Answer Most
  10. The Margin a Movement Has to Clear
  11. Round Trip Economics and the Ballast Leg
  12. Mandate, Limits and Who Signs It Off
  13. The Decision Taken End to End: Worked
M7 The Execution Window Ch 82-91
  1. What an Execution Window Is and What Shuts It
  2. Sequencing: Which Leg You Fix First
  3. Tonnage Availability as the Binding Constraint
  4. Funding Availability as the Binding Constraint
  5. Berth, Slot and Terminal Availability
  6. The Bid You Actually Get at the Far End
  7. Documentary and Clearance Timing
  8. Holding One Leg While You Chase Another
  9. A Window Opening and Shutting: Worked
  10. Walking Away and Pricing the Cost of Trying
M8 Hedging the Movement and What Survives Ch 92-101
  1. What an Arbitrage Hedge Is Trying to Protect
  2. Which Legs Can Be Covered and Which Cannot
  3. Freight as the Leg That Resists Cover
  4. Residual Basis Left After the Cover Is On
  5. Timing Residual Between Hedge and Cargo
  6. Quality Residual the Cover Cannot Reach
  7. Quantity Residual From Tolerance and Loss
  8. Operational Exposure No Instrument Covers
  9. Sizing the Residual as a Reserve Against Margin
  10. Stating the Residual Honestly to a Committee
M9 Why Computed Opportunities Fail Ch 102-112
  1. The Gap Between the Model and the Trade
  2. Stale Components and the Dating Discipline
  3. Wrong Month, Wrong Basis, Wrong Quotation
  4. Volume That Was Never Actually Available
  5. The Freight Quote That Was Indicative
  6. The Destination Buyer Who Was Already Covered
  7. The Plant That Cannot Physically Take the Grade
  8. Finance That Did Not Clear in Time
  9. Cost Lines Quietly Left Out
  10. The Opportunity Everyone Else Can Also See
  11. A Failed Movement Taken Apart: Worked
M10 Competing Cargoes to One Destination Ch 113-124
  1. Setting Up the Comparison Properly
  2. The Candidate Cargoes and Their Headline Numbers
  3. Transport Charges for Each Candidate
  4. Timing and Arrival for Each Candidate
  5. Funding Cost for Each Candidate
  6. Processing Fit and Value for Each Candidate
  7. The Comparison Table Assembled
  8. Why the Cheapest Grade Lands Worst
  9. What Would Have to Change to Reverse the Ranking
  10. Defending the Choice to the People Who Pay
  11. What These Methods Cannot Tell You
  12. Where the Threads Are Picked Up Next

The brochure gives each of these 124 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 14 of twenty

It stands alone, and it is also the entry point to the Crude Oil Desk Academy pathway.

Enrol or enquire See the whole pathway