Incorporated in Dubai in 2006, OQ Trading has successfully established a global presence as one of the world’s major participants in the commodities trading industry – trading approximately 30 million tonnes of energy products each year. We provide logistical solutions and risk management tools to those who require it, facilitating transactions while minimising risk to the parties involved. With a global network of trading offices, ideally located in all the major oil trading regions (Dubai, Houston, Rotterdam, Shanghai and Singapore), we are able to capture value from arbitrage flows and evolving market dynamics, utilising our world-class logistics and supply chain management capabilities.

Wholly owned by the Government of Oman, OQ Trading was initially established under the name Oman Trading International (“OTI”) as a joint venture between Oman Oil Company and a leading international energy trader. Through our heritage, we have developed a world-class operation, enabling the business to compete effectively on a global scale. We seek long-term commercial relationships, reflected in our growing network of trusted suppliers and customers, which include the world’s largest national oil companies as well as refiners, producers, international oil companies and independent trading houses.

As the country’s international commodities trading arm and a fully integrated division of OQ, OQ Trading is not only placed as the exclusive market facing partner to the OQ Upstream and OQ Downstream businesses, but is also a significant lifter of Omani hydrocarbons via non-OQ owned assets including the Ministry of Energy & Minerals and Oman LNG.

Our focus within Oman is on the development of oil and gas-based industries and other energy and energy related projects in partnership with international industry players, capturing and creating incremental margin from optimisation of the value chain in the oil and gas sector. Outside Oman, OQ Trading is actively pursuing commercial ventures in the energy value chain to provide an alternate source of revenue for the Government of Oman.

OQ Trading has a robust risk management framework and control environment in place to mitigate the inherent risks of trading to a tolerable level for the organisation and the appetite of the OQ Group. OQ Trading Executive Management and OQ Trading Oversight Committee set risk appetite through:

• A group economic capital limit.
• Portfolio risk limits for different risk classes.
• An approved risk limit registry comprehensively documenting active trading mandates.

The risk management framework at OQ Trading contains a suite of risk management policies, procedures and delegations. We rigorously apply the following key principles:

• Compliance with all relevant risk policies and limits are monitored daily by the risk management function.
• We act on breaches of policy and employ strict escalation procedures to ensure that both OQ and the businesses it operates in are adequately protected.
• We appraise risk in our transactions and wider business activities on an on-going basis to ensure that actions are taken to address any changes in the risk profile of the group.
• We ensure management have sufficient timely quantitative and qualitative information regarding the risks within the businesses through daily, weekly and monthly risk reporting.

Through day-to-day trading activities, OQ Trading assumes commodity price risks. Outright price risks inherent in our contracts to purchase or sell physical commodities are systematically hedged either through an offsetting physical position or through the use of financial instruments. Residual basis risk assumed is managed within approved limits. OQ takes a very prudent approach to counterparty credit risk. Limits are assigned by the credit function for all trading counterparties, supported by additional concentration limits across the portfolio. First class security or adequate risk cover is our priority, ensuring the risk of significant financial loss is negligible.

At OQ Trading we have a structured and risk aware approach to conducting business, acknowledging the inherent challenges present in the industry in which we operate. Combined with the depth of expertise and experience within the company, this allows for effective management of exposures, resulting in a reliable and trustworthy trading partner for our counterparties.

Transporting energy in a safe, reliable and timely manner is a key component of our business. Our experienced chartering team has access to competitive and flexible shipping, covering the full spectrum of ship sizes, from VLCCs all the way down to coastal barges. Having built strong relationships with the terminal operators, our operations team works closely with them to ensure each transaction is completed smoothly and efficiently. In any given month, OQ Trading manages more than 30 active ship voyages.

In support of OQ’s global footprint, we lease more than 300,000m³ (1.9 million barrels) of clean products storage in the port of Sohar. From this storage, we blend multiple grades of gasoline and diesel for the markets we supply. Moreover, we have access to over 60,000m³ of Petrochemical tank storage in Rotterdam, which provides the flexibility to supply barges to various downstream contractual counterparties in an efficient and timely manner. We deploy a number of other shipping and logistics strategies including making bulk, breaking bulk and storing for future use.

OQ has recognised that in a constantly maturing and truly global industry, the optimal financing solution for importers, exporters, producers and processors may not always be traditional bank finance. The provision of competitive working capital support and structured finance solutions to our counterparties enables OQ Trading to serve those trading partners across a range of dimensions, maintaining long-lasting relationships that are built on trust and performance. We can utilise diversified funding sources combined with our deep expertise in supply & trading to provide innovative offerings centred on the delivery and/or offtake of energy commodities.

A strong standalone balance sheet and government shareholding structure provides an efficient base for financing ever expanding trading activities, increasing volumes and expanding to new regions. Collateralised and self-liquidating short-term loans are predominantly utilised, secured by the underlying physical commodity to create low risk structures and consequently competitively priced funding. OQ Trading’s principal funding source is a multi-region syndicated Borrowing Base credit facility, successfully refinanced in June 2020.