In Lagos, there is an oil trader who has been with the same supplier for 14 years, an impressive accomplishment in today’s combustible marketplace. In 2020, when banks retreated, and liquidity was hard to find, that supplier easily agreed to terms of 90-day payment. Why? Because in 2012, the trader had a contract and rather than walking away, they took a small loss. That is character, trust, integrity, led to a relationship. At Terra Commodities, we firmly believe that trading is not simply an exchange of barrels and bank wires, it is a business based on reputation, loyalty, and trust. It is a relationship that takes time and in the right circumstances, we believe good relationship result in good trading deals.
Why Most “Partnerships” Fail.
The average oil trading relationship lasts on average 18 months, and it is easy to see why. Buyers will leave for a $0.10/barrel discount for short term savings with no concern for long-term reliability. Sellers will also use vague force majeure clauses to shift their requirements, when the market has swung. The parties will continually withhold information from each other and treat each deal as a zero-sum game. There is no trust and therefore increased risk for all the players involved. At Terra Commodities, we strive to create lasting relationships by aligning incentives, requiring transparency, and are committed to managing both sides of a risk. In a market of volatility, consistency and trust are differentiators and competitive advantages.
How Terra Builds Decade-Long Bonds
At Terra Commodities, we don’t just connect buyers and sellers, we design the sustainable trading partners.
- First we align through our Introduction Protocol, in not only deal specs, but also by company culture.
- A family-run refinery does not think, or move, like a hedge fund backed desk.
- Then we structure the First Deal. We do so with small volumes and phased payments in order to better manage exposure and build trust early.
- After the deal is done we have face-to-face debriefs to deal with all the potential friction points.
- Next we play out a Crisis Test, a minor disruption, real or staged, and we look to see how both sides react under pressure. Because in trading it is not the contract that matters.
It’s the behavior when what goes wrong.
What Lasting Partnerships Deliver
This is the hidden value of long-term trading relationships. When markets tighten, as they did during the 2022 diesel crisis, first access goes to trusted counterparties, not the highest bidder. Relationships unlock refinery maintenance schedules before they’re public, giving you a competitive edge. They even open doors to joint ventures in storage and infrastructure, like terminal acquisitions. One Spanish client reaped the rewards of patience: after an 11-year partnership with a Greek supplier, he secured EN590 at $12/ton below market. Why? Because years earlier, he absorbed a late cargo without penalties. Loyalty isn’t sentimental, it’s strategic. Relationships remember. Markets don’t.
Three Unbreakable Rules
Great partnerships thrive on transparency, consistency, and real human connection.
That’s why our first rule is simple:
- Never surprise each other with bad news, problems should be shared early and solved together.
- Second, we share market intelligence freely, when one side benefits, both grow stronger.
- And third, we always visit each other at least once a year, because no email or call replaces a handshake and a shared coffee.
This isn’t just about oil; it’s about building trust that survives volatility.
Ready to trade beyond transactions? Let’s build your forever partnership. We don’t just broker deals. We build legacies.
