August 8, 2016

James Langley

In the early days of Russian oil trading I received a call from a client in Moscow. The client needed expert help in solving a crude oil trading and blending question. He asked:

“How much sugar does it take to convert a barrel of sour crude into a barrel of sweet crude?”1

After closing my mouth and taking a deep breath, and being a good consultant who tries not to jump to conclusions, I said, “That’s an interesting question. Tell me more about what you are trying to do.”

As he described his business, and the needs of his customer, it became clear that he understood the crude trading business very well, and that his question was indeed legitimate.

My client had Urals crude (a sour crude oil) available in his supply, but his customer needed sweet crude oil for processing in his refinery. The refiner only had cash to pay the sour price for crude, but being in Cuba, could offer in barter a quantity of sugar in addition to cash. The better question, “How much sugar is required to get sweet crude instead of sour crude?” His question related to a three-way commodities exchange, and the crude supplier needed broad commodities knowledge for pricing, logistics and financing.

Often our clients have a problem or opportunity that they are uncertain just how to attack. It might be a one-off event, or could open doors to recurring new businesses. The important thing is that they don’t “blow it” on the first pass. It may be something their permanent staff has not encountered, or has the time to pursue. They need access to experiences and business understanding beyond their norms.

Stillwater can provide this knowledge and support. We understand that our clients often see an opportunity, but may not be able to see through the full implementation, or even articulate the critical issues in the beginning. They just sense that it is important.

We know that issues we face are rarely easy. The easy ones are solved before we arrive. We follow a version of the carpenter’s axiom – we listen twice and recommend once. Call us to learn more of the experiences we can bring to your table.


1 “Sour” crude contains high levels of sulfur, and is usually lower in value. “Sweet” crude is low in sulfur.