A big problem that lay people are unaware is consistency. Refineries need consistency in their feedstocks. An inconsistent blend will impart costly adjustments to refinery equipment. This downtime increases costs. A bad blended batch slipping by is a constant worry. It happens far too often.

Refineries usually buy their feedstock anywhere from Platts minus 3 to minus 9 FOB or sometimes CIF. The quoted trading price we see is usually not the price paid by most refineries. Most refineries sign one year supply contracts. However, some refineries in Asia are now signing longer multi year contracts to ensure consistency of supply and predictable cost.