FOB

Also known as: Free On Board

FOB is a common pricing basis for a commodity that is being shipped. FOB indicates that the price is for the commodity loaded onto a vessel and ready for shipping. So it includes the cost of the commodity and of loading, but not the cost to deliver it to its final destination. For a FOB sale, title to the oil passes to the buyer as the oil passes the loading flange of the loading ship.

FOB pricing is common in markets where a commodity is exported in large volumes, to multiple destinations.

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